The U.S. Pharmaceutical Industry Under the Shadow of Tariffs: Corporate Hoarding for Self-Preservation and the Public's Struggle with Rising Drug Costs

Against the backdrop of a seismic shift in the global trade landscape in 2025, the U.S. pharmaceutical industry is mired in a survival crisis triggered by tariff policies. Pharmaceutical companies are scrambling to hoard active pharmaceutical ingredients (APIs) and finished drugs, while the public is gripped by anxiety over soaring drug expenses. The specter of supply chain disruptions and drug shortages looms large, pushing this pillar industry to an unprecedented crossroads. This chain reaction set off by trade policies has laid bare the deep-seated structural contradictions within the U.S. healthcare system.

1. The Corporate Hoarding Frenzy: A "Doomsday Dash" in the Supply Chain

Faced with the threat of tariffs on pharmaceuticals imposed by the Trump administration, U.S. pharmaceutical companies have launched an unprecedented hoarding race. Eli Lilly, the world's largest insulin producer, has urgently increased its inventory of APIs from Chinese factories to an 18-month supply, while Pfizer has chartered flights to bring back $230 million worth of antibiotic formulations from India. This "doomsday dash" procurement strategy has directly led to a 47% surge in U.S. pharmaceutical imports in the first quarter of 2025, with the proportion of Chinese API imports soaring from 38% to 52%.

The costs of corporate hoarding are now coming to light. Merck's financial reports reveal a 210% year-on-year increase in warehousing costs, with the inventory turnover days for some generic drugs extending from 60 to 150 days. More critically, this "short-term safety net" is eroding companies' long-term competitiveness. Teva, a generic drug giant, has had to suspend three production lines to pay additional tariff deposits, resulting in its market share being encroached upon by its Indian rival, Sun Pharma.

2. The Public's Struggle with Drug Access: Skyrocketing Costs and the Collapse of Medical Equity

The butterfly effect of tariff policies is manifesting on Americans' drug bills. Take targeted cancer therapies as an example: a drug originally priced at 12,000couldseetheout−of−pocketcostforpatientsskyrocketto28,000 after tariffs and logistical costs are factored in. More alarmingly, the alarm bells for drug shortages have already sounded. Data from the American Society of Health-System Pharmacists shows that as of March 2025, there were 323 active drug shortages, with 67% involving drugs produced using APIs imported from China.

The collapse of medical equity is particularly evident among vulnerable populations. In Detroit, Michigan, patients at the non-profit "Corner of Hope" clinic have had to reduce their daily insulin dosage from 40 units to 25 units to stretch their supplies. This "dose reduction therapy" has directly led to a 34% increase in the emergency room admission rate for diabetic ketoacidosis in the area. Ironically, despite per capita healthcare spending in the U.S. reaching $12,000, life expectancy is 3.2 years shorter than in Canada. This paradox of "high spending, low output" is being further exacerbated by tariff policies.

3. The Throes of Industrial Restructuring: Fissures and Renewal in the Globalized Supply Chain

The tariff shockwave is reshaping the global pharmaceutical industry landscape. Chinese API manufacturer Huahai Pharmaceutical is accelerating its "Southeast Asia Diversion Plan," having established a new FDA-certified cephalosporin antibiotic factory in Vietnam. Meanwhile, U.S. domestic companies are caught in a dilemma: Johnson & Johnson plans to invest $5 billion in building an API production base in Ohio, but the project will take at least five years to come online, far too late to address immediate needs. This "de-globalization" industrial restructuring has led to a 17% decline in global pharmaceutical supply chain efficiency and a 23% increase in R&D costs.

The innovative drug sector is also simmering with undercurrents. BeiGene's BTK inhibitor zanubrutinib, despite holding less than an 8% market share in the U.S., has unexpectedly benefited from tariff policies—its competitor, ibrutinib, has been forced to raise prices due to API shortages, creating a $320 million market opportunity for zanubrutinib. This perverse competition, where "inferior products displace superior ones," exposes the inhibitory effect of tariff policies on industrial innovation.

4. A Systemic Crisis: The "Impossible Trinity" of the Healthcare System

The pharmaceutical industry crisis triggered by tariff policies is, in essence, a concentrated outbreak of the "impossible trinity" within the U.S. healthcare system. The three vertices of this triangle are: drug accessibility, industrial competitiveness, and healthcare cost containment. The Trump administration's attempt to achieve "manufacturing reshoring" through tariff policies has instead led to a decline in drug accessibility. As companies seek to maintain profits by passing on costs, this runs counter to the goal of healthcare cost containment. This internal conflict in policy objectives is reflected in the 0.3% contraction of GDP in the first quarter of 2025, with healthcare spending declining by 1.8%—a major drag on economic growth.

The deeper contradiction lies in the U.S. healthcare system's long-standing reliance on a distorted model of "global sourcing + patent monopolies." While 30% of global APIs and 45% of medical devices are produced in China, U.S. pharmaceutical companies maintain gross margins exceeding 200% through patent barriers. This "scissors difference" model of industrial division is accelerating its collapse under tariff policies. The International Federation of Pharmaceutical Manufacturers & Associations warns that if tariffs persist, 120 new drug R&D projects will be canceled globally over the next five years, with 37% involving U.S. companies.

5. The Path Forward: Rebuilding a Resilient and Equitable Healthcare Ecosystem

To break free from the current predicament, it is necessary to transcend the binary opposition of "tariffs or no tariffs" and construct a more resilient and equitable healthcare ecosystem. At the industrial level, the U.S. can draw inspiration from the EU's "API Strategy," using tax incentives to guide companies in establishing regional supply chain alliances. On the payment side, Germany's "reference pricing system for drugs" and Japan's "price renegotiation mechanism" offer replicable experiences for controlling drug costs. More importantly, the U.S. must confront structural reforms in its healthcare system—redirecting 18% of per capita healthcare spending from emergency care to preventive healthcare and increasing primary care coverage from 62% to 85%.

The pharmaceutical industry crisis triggered by tariff policies is, in essence, a stress test of global public health governance capabilities. When the boomerang of trade protectionism strikes its own healthcare system, the U.S. needs to rethink: Should a true medical powerhouse be built on tariff barriers or on the foundation of global collaboration? This crisis leaves behind not only empty pharmacy shelves and soaring drug bills but also a profound question about the well-being of humanity and the future of globalization.