Month: April 2025

A pharmacist collects medication for recipes in a pharmacy.

Simon Dawson | Bloomberg | Getty pictures

The planned tariffs of President Donald Trump for pharmaceuticals imported in the USA could have far -reaching consequences for drug manufacturers and American patients, some experts said CNBC.

The tasks could disrupt the complex pharmaceutical supply chain, increase the prices for medicines in the USA and make the bottlenecks of critical medicinal products worse, some experts in health policy said. Drug manufacturers often rely on a global network of manufacturing points for various steps in the production process.

“We are already in a state in which prescription drugs are unaffordable for many,” said Mariana Socal, professor of health policy at the Johns Hopkins Bloomberg School of Public Health, to CNBC.

“Everything we change, every trade policy, every tariff policy, everything that costs for prescription medication, be it in the supply chain, the sales network, the risks of further increasing the costs for the consumer, and the affordability crisis for drugs in America, which we have had for a long time,” she said.

This week, Trump doubled plans to impose “Major” Pharmaceutical-Specific Customs “, which confiscated the shares of some drug manufacturers in the early Wednesday. He said that after a market failure on the same day, he would take steep tariff rates for dozens of countries, but it does not seem to apply to taxes for certain industries such as cars, steel, aluminum and medicines.

Trump frees pharmaceuticals from his relaxed tariffs, which were introduced last week. Nevertheless, he said that the duties for drugs will encourage drug manufacturers to bring production operations to the USA, at a time when domestic production in the industry has shrunk considerably.

However, experts said it was unclear whether tariffs will lead more companies to do more drugs in the United States. Drug makers would cost billions of dollars and at least several years so that they do this, added them.

Some drugmakers such as Eli Lilly, Bristol Myers Squibb and Abbvie can be better positioned than others for weather tariffs, since they have larger production facilities in the USA than internationally, said TD Cowen Analyst Steve Scala last week in a note. Most of their locations that are responsible for the production of the active ingredients in drugs are also in the United States, he added.

In the meantime, Novartis and Roche are “rather at risk” because they only have a few US plants and a higher proportion of international locations, said Scala.

The effects of tariffs will look different depending on the type of drug, according to experts. Manufacturers of already cheaper generics that make up about 90% of the drugs prescribed in the USA could be pressed most by tariffs, according to Arda Urals, head of Ey America's bio -science.

These drugs, which are much more affordable for patients, have far less profit margins than branded medication and often rely on ingredients made in China and India. Therefore, tariffs could force some generics to leave the US market as a whole.

According to a report from Rand 2024, the government's efforts could ultimately undermine the government's efforts to pay the high costs for health care in the US US in order to curb the high costs for health care in the US Americans as for prescription drugs for prescription drugs.

Drug shortage could get worse

The tariffs could worsen the unprecedented lack of medicine in the United States, which is powered by factors such as quality control and demanding points. According to the American Society of Health system pharmacists, there are 270 active drug shortages in the USA in the USA, which have remained unchanged in the last three quarters.

However, some drug categories will probably be more susceptible to bottlenecks than others when the tariffs come into force, said Marta Wosińska, a senior scholarship holder at the Center on Health Policy of the Brookings Institution.

Generic sterile injectable drugs that are often used in hospitals are already more susceptible to bottlenecks and have had continued care problems for years. This includes products such as IV salt bags, cancer chemotherapy and lidocaine that are used to deaf pain.

Generic sterile injection values ​​have complex manufacturing processes and low profit margins, which could make it more difficult for their manufacturers to absorb cost increases caused by tariff.

IV line for liquid for patients who lie on the bed in the hospital

undefined undefined | iStock | Getty pictures

The manufacturers of these injections can not increase cost increases due to certain contracts with so -called group purchase organizations that blocked the prices but did not save the amount of their buying. Group shopping organizations Broker drug acquisitions for hospitals and other healthcare providers and their contracts with manufacturers generally last one to three years.

If manufacturers of generic sterile injections cannot pass on higher costs, you can leave the US market and worsen the lack of these essential medication, said Wosińska. She said her other option was the costs that “in relation”, since they could influence the quality of a product and some manufacturers could cause production to temporarily slow down production due to problems such as contamination.

Generic oral drugs are also exposed to low margins, but their production is less complex and the market is more competitive. This includes frequent pills such as statins for high cholesterol levels, several blood pressure medication and metformin for blood sugar control.

These oral drugs are used most by Americans, since in 2024 in retail and in post pharmacies in retail and in Post pharmacies in 2024 generic medicines tablets and capsules were spent, a recently from Wosińska.

She said CNBC that these medication acts more like a “Spot market” on which pharmacies and buyers can quickly change suppliers when a source of tariffs is disturbed. While taxes can increase prices, the manufacturers of these medicines have fewer binding contracts, so that according to Wosińska, they can cost more than their injectable counterparts.

Costly medication could become more expensive

The effects of tariffs on costly branded medication that have a patent protection and are not exposed to any competition by generics will look very different, some experts said. Customs for drugs imported from Europe would probably be the most difficult because there is a considerable amount of medication production there and in the USA

“Brand products are already produced in the United States with around 50%, and the primary import comes from Europe at around 35%,” said Ey's Ural.

In China or India there is “little to no production” of these medication, he said.

Nevertheless, branded medication usually have higher profit margins and more stable supply chains than generic medication. This makes brand manufacturers better positioned in order to absorb higher costs of tariffs or to hand them over to payers – and ultimately the consumers.

Since manufacturers of a certain branded medication monopolize its market, they could increase its price and “leave the American consumer behind without any other choice, since these products are protected by patents that no one else has,” remarked John's Hopkins' Socal.

“In tariffs, the question of how much higher prices will pay for these branded products will pay?” she said.

Roel Smart | Getty pictures

Patients will probably notice higher prices for branded medication than more than increases in generic medication prices, said Wosińska. A price increase of a branded medication would lead directly to higher expenses for people in high commercial insurance plans or with high civil insurance rates, as it stated.

It is still unclear what Trump's tariffs will look like. However, a patient with a 20% insurance rate could increase his monthly utilization costs if the tariffs are collected, since their share of the costs is bound directly to the price of the mark drug.

In contrast, generic medication already has lower price points, “even if a drug worth 3 US dollars increases by 25%, this will not be something that will really appear for patients,” Wosińska told CNBC. She added that many patients have insurance plans with solid CO-Pays for these medication.

Overall, “the primary influence on patient pocket books would be indirect – the premia would probably increase if the payer expenditure for medicinal products increases,” she said in her Brookings report.

The question is whether the manufacturers want to increase prices because they face patients and legislators on both sides of the gang to calculate higher drug prices in the USA compared to other countries. Both the Trump and Biden management have targeted this imbalance.

In a grade of March 28, the evercore -isi -analyst IMer Raffat said that he had heard of several CEOs of pharmaceuticals that “they may have to pass on some of the effects [from tariffs] as a price increase. “

But he said that this would “add more fire to the higher prices of many drugs in the United States in the United States in the United States. Raffat said that it could go back “in great way” and could revive a plan from Trump's first term that paid the US prices to the other similar countries.

The redesign of the production will not be easy

A sign with the Company logo is located on March 17, 2024 in Indianapolis, Indiana, outside the headquarters of Eli Lilly and Company.

Scott Olson | Getty pictures

Some Wall Street analysts have made concerns that it will be difficult to redress production in the United States because it is expensive and could take several years.

“The global supply chains are complex, and Pharma among most – it is not as easy to move where someone reads on an iPhone,” said Evan Seigerman, analyst by BMO Capital Markets, in a note on Wednesday.

He said that the tariffs will “probably do little to push back to the United States, since companies already have robust operations in the country. Seogerman said he assumed that most major pharmaceutical companies will probably set the goal of” waiting for Trump until the end of the presidency in order to consider more permanent production decisions “.

Some companies have already invested billions to increase US production. This year, Eli Lilly And Johnson & Johnson Both announced new domestic investments worth 27 billion US dollars and 55 billion US dollars for several years.

However, some of these drumakers have already pushed back to tariffs and warns of their potential effects on research and development in the industry.

“We cannot violate these agreements, so we have to eat the costs for the tariffs and compromise in our own companies,” said Dave Ricks, CEO of Eli Lilly, last week to BBC. “As a rule, this will be in the reduction of employees or research and development, and I assume that F&E will come first. This is a disappointing result.”

Andrew Witty, CEO of Unitedhealth, attested to the Finance Committee of the Senate for Capitol Hill in Washington on May 1, 2024.

Kent Nishimura | Getty pictures

Follows the massive cyber attack Unitedhealth Group Change of healthcare last year, the company initiated a temporary financing aid program to support medical practices in short-term cash flow needs and to offer loans without interest without additional fees.

A little more than a year later, Unitedhealth is aggressively based on borrowers and demands that they “repay their outstanding credit immediately”, said documents that were viewed by CNBC and providers who received funds. Some groups were asked to repay hundreds of thousands of dollars in a few days.

Optum, Freipes, ARM arm from Unitedhealth, the borrowers, tells the borrowers that he reserves the right to “compensate for claims” for the practices, which means that the company will hold back separate funds until the loan repeats.

It is a significant change in attitude for the company that suffered a cyber attack in February 2024, which affected data from around 190 million Americans, the largest that violates US history. The resulting disorder led to severe failures in the entire health system, so that many providers are temporarily unable to be paid for their services. Some immersed in their personal savings to keep their practices alive.

During a hearing of the Senate about the attack in May, Andrew Witty, CEO of Unitedhealth, said providers only have to oblige the loans to repay if “they, not me, but they confirm that their cash flow will be normalized”.

Several doctors who have exploited the financing said CNBC that they cannot meet the company's new requirements. Dr. Christine Meyer, an internist, who started a practice in Exton, Pennsylvania, received a letter from Optum at the beginning of this month, which asked her to immediately submit the payment of her organization.

“We are not in any position to start repaying this loan,” Meyer, who started her practice about 20 years ago, told CNBC. After the violation, she was a loud critic of Unitedhealth.

“At this point I only look at all of my legal options,” said Meyer. “But the repayment of 750,000 US dollars in five days will obviously not happen.”

Unitedhealth did not comment on certain cases, but a spokesman for Change Healthcare confirmed that the company started repeating the loans.

“Now we have started more than a year after the event and with recovered services, we have started to regain the interest -free funds provided by us to the providers,” said the spokesman in a statement.

The company said that the US Ministry of Health and Human Services followed the same approach “as part of its own cyber attack credit” last year. HHS started a separate program for financing aid as part of the Centers for Medicare & Medicaid services last March. CMS said it would automatically receive the payments of Medicare's claims, and the providers could arouse interest according to a publication.

“We continue to work with providers on the repayment and other options and continue to contact the providers who have not responded to previous calls or e -mail inquiries to receive further information,” said the spokesman for the change in the healthcare system.

The providers were informed that Unitedhealth had reserved the right to withhold future payments when they registered for the financing aid program, the company added. CNBC checked a copy of a credit agreement for the program and confirmed this explanation.

Change Healthcare, which offers tools for payment and sales cycle management, was acquired by optum in 2022.

After Unitedhealth discovered the violation last year, he wasolated and separated the affected systems. The company paid more than $ 9 billion to the providers in 2024, and in January more than $ 4.5 billion was repaid in the fourth quarter. According to Unitedhealth, providers would receive an invoice as soon as the standard payment operations were resumed and that they would be subject to a repayment period of 45 working days.

“Change Healthcare will inform the recipient that the financing amount is due after the processing or payment processing services for claims have been resumed and payments that are affected during the service period are processed,” says the website.

Dwindling deposits, income lost

While the vast majority of Change Healthcare's services have been restored over the past year, according to the cyber attacks -reaction website of Unitedhealth, three products are still listed as “sub -service”.

And doctors are still tumbling.

Meyer said when the violation took place, she observed how the daily deposits of her exercise of 60,000 to 80,000 US dollars shrink to about $ 150 overnight. She applied for the temporary funding aid program from Optum and received a total of 756,900 US dollars after some difficulties and with the company back and forth with the company.

Former Senator Bob Casey Jr., D-Pa., Meyer's story met during the hearing of the congress in May. He asked funny about the company's approach to the repayment process.

“I would like to confirm to you and Dr. Meyer that we do not intend to ask the repayment of loans until she realizes that your business is normal again,” Witty told the legislators. “Even then, after 45 working days – 60 calendar days – we would search for repayment and there would be no interest and no fee associated with this loan.”

“So it would be a determination that she hits?” Asked Casey.

“It's absolutely right,” said Witty.

Meyer said that is not what happened.

The headquarters of the Unitedhealth Group Inc. is in Minnetonka, Minnesota, USA

Mike Bradley | Bloomberg | Getty pictures

On January 24, she received a message from Optum, which was viewed by CNBC, in which the repayment was requested, since “the service disorder for most customers has ended”. Meyer said she called and told the company that she was “not paying in any position”.

Meyer claims that due to the change Healthcare cyber attack, her practice has lost more than 1 million US dollars of income. She announced CNBC that the number was based on a forensic financial analysis that had carried out her practice by comparing her fees with payments in recent years. The number of 1.2 million US dollars is loss of all insurers, not only for Unitedhealthcare, said Meyer.

On April 1, Meyer received another message in which an immediate repayment was requested within five working days. The letter was sent to Meyer. However, the name of the practice on the letter, the Insight advice and the total amount due from 925,200 US dollars was wrong.

Meyer said she called Optum again and the company made a mistake, but she had five days to repay her actual total number of $ 750,000. At this point, the company would hold back its Unitedhealthcare payments, which it called “Shakedown”.

Meyer said her practice usually receives annual damage payments from around 150,000 to 200,000 US dollars from Unitedhealthcare.

“I think I will only take her back for the next three years until you get your money back,” she told CNBC.

In a contribution about LinkedIn on Thursday, Meyer wrote that she and her team have made a plan to leave the slightest amount of money in the account to receive payments from Unitedhealthcare. If it is not there, you cannot get it. “

“Very frustrating experience”

Dr. Purvi Parikh, allergy sufferer and immunologist with a private practice in New York, told a similar story.

Parikh's practice received around 440,000 US dollars in financing aid after the violation. She said she started receiving repayment at the end of last year and that optum threatens to compensate for claims that are to be paid to the practice.

“We were already very hard from the change Healthcare Hack,” said Parikh in an interview. “Now ask back all of this money or you will hold future payments ransom. It was only a very frustrating experience with optum.”

In January, Parikh's practice called for an extension by one-month conclusion of $ 101,650 to try to prevent Unitedhealth from holding back other payments. Parikh's colleague wrote in the E -Mail request: “It was quite difficult to recover financially.”

Optum granted Parikh's practice.

“People don't just have this amount of money that just sitting around,” said Parikh. “We paid everything back, but it wasn't without difficulty.”

On Friday, the American Medical Association sent a letter to optum in which the company asked not to use a “uniform size” approach to repayment of loans. The AMA also asked Optum to honor its commitment to decide when the repayment process should begin.

“Every practice will have a different level of patient volume, income production and cost pressure and requires a repayment plan that does not create the same direct financial streaks that are experienced during the cyber attack when the CHC systems were not functional,” wrote AMA CEO, CEO from AMA.

A doctor who runs a pediatric practice in New Jersey said that Unitedhealth has already started to withhold payments from the organization. After the violation of the health care of changes, the practice received more than 500,000 US dollars in financing aid.

The doctor, who must not be mentioned due to the sensitive nature of the situation, said the practice had started to receive telephone calls and e -mails from Optum in order to ask for repayments from the end of last year. The group stated that it did not have the money, but had set up a payment plan and had started the process.

However, the doctor said that his invoice department had determined that Unitedhealth had already started to withhold damage payments. In his explanation of the services in which an insurer describes, there is a line with the inscription: “The amount to be paid in this declaration was used to repay amounts that were due to Change Healthcare Operations, LLC.”

REGARD: Department of Health and Human Services opens the Hack examination at Unitedhealth's Change Healthcare