Prescription Drugs and Tariffs
There have been a series of announcements/activities around prescription drugs and increased tariffs. A few quick updates on where things sit.
- President Trump threatened to up to a 250% tariff on pharmaceutical imports this week.
- Currently is no overall tariff on prescription drugs. A section 232 probe that would provide justification for the Administration on broad based tariffs on prescription drugs is due by the end of the year (December 27th) and a final decision expected in March 26.
- However, President Trump could act before then. For example, there is ongoing threats around most favored nation pricing as exemplified by the recent announcement from the White House
- EU – Prescription drugs from the European Union are currently facing a 15% tariff. This is separate from the sector-specific tariffs.
- India – While India currently is facing a 50% tariff, prescription drugs are currently not included in the tariff.
- Note that many of the ongoing tariffs are subject to litigation as well as Administration changes and therefore will likely change in the near term.
Economy
Unemployment claims crept higher this week. There are growing signs of economic slowdown as well as higher inflation.
Rural Health Grants
CMS announced that states would be able to apply in early September for a portion of the rural health fund ($) The Rural Health Transformation Program requires states to apply for funds that could total up to $50 billion. CMS must approve applications by the end of the year although transparency on the criteria used to decide on allocation of grants/ultimate payments remains under question.
ACA Rates
KFF-Peterson Institute released its analysis of proposed 2026 rates. The median premium increase is 18%, which would be the highest rate increase since 2018 (i.e., the first year of silver-loading). The report also highlights some of the key drivers of the increase such as a higher than average trend, morbidity effects related to the scheduled end of enhanced premium subsidies (about 4% on average), and high prescription drug cost trend.
