US biopharma innovation likely to be harmed by ongoing trade war with China

While the ongoing trade war between the USA and China will have huge ramifications on the biopharmaceutical industry for both countries, it appears that China is in a much better position from a negotiation standpoint, according to analysts.

On April 3, 2018, the US Trade Representative’s (USTR) office announced its intention to add a 25% tariff on around $50 billion worth of Chinese imports across 1,300 product categories, many of which are used by drug makers. According to the Food and Drug Administration, approximately 80% of active pharmaceutical ingredients (APIs) used by US manufacturers come directly from China and India.

The Trump administration has continuously mentioned reducing drug prices in order to drive patient costs down, but the proposed tariff is expected to do just the opposite.