LEILA FADEL, HOST:
President Trump is promising to put tariffs on imported pharmaceuticals. While big drug companies seem to have plans to weather the storm, independent pharmacists are trying their best to prepare with limited information. Jackie Fortier with our partner KFF Health News has the story.
JACKIE FORTIER, BYLINE: Salt Lake City pharmacist Benjamin Jolley (ph) supports tariffs on pharmaceuticals in the name of national security.
BENJAMIN JOLLEY: If we go to war with China someday, like, there will be no prescription drugs in the United States unless something changes.
FORTIER: But on the other hand, tariffs could put independent pharmacists like him out of business.
JOLLEY: I'm not sure that we're going to do it the right way. And I am definitely sure that it's going to raise the price that I pay my suppliers.
FORTIER: Independent pharmacists already face high operating costs and low insurance reimbursement for many generic medications. Some independent pharmacists were already struggling to keep the doors open even before President Trump launched his trade war.
SCOTT PACE: The one word that I would say right now to describe tariffs is uncertainty.
FORTIER: Scott Pace (ph) is a pharmacist and owner in Little Rock, Arkansas. He's trying to predict what the pharmaceutical tariffs will look like.
PACE: We don't know what products, whether it's at the active product ingredient level, at the finished product level - whether it's on the plastics that contain the products, whether it's on our vials or labels or lids.
FORTIER: Unlike other retailers, pharmacies can't pass along higher costs to their customers. The payments they get at the register are already set under contracts with health insurance companies and pharmacy benefit managers. So if tariffs happen, Pace is afraid pharmacists will have no choice but to eat the increased cost.
PACE: That's really a scary proposition on an industry that's already on razor-thin margins.
FORTIER: To try to weather major price fluctuations, Pace has stocked a three-month supply of his most commonly dispensed generics - cheaper versions of popular drugs.
PACE: Those are the ones that are the diabetes drugs, are the blood pressure medicines, are the antibiotics, are those things that I know folks will be sicker without.
FORTIER: Generics make up a whopping 90% of prescriptions in the U.S. John Murphy is president of the Association of Accessible Medicines, a trade group that represents generic manufacturers. He says if the tariffs happen, shortages will follow.
JOHN MURPHY: If you increase the cost of goods via tariff on a medicine that has, in some cases, less than a 5% margin, they just may not sell them in the United States.
FORTIER: Most pharmaceutical drugs go on a world tour before getting to your mouth. That pill you took this morning probably began as an active ingredient made in China or India. Those chemicals are then sent to other factories, usually elsewhere in Asia or in Europe, and made into medications. Murphy says no amount of tariffs will force generic drugmakers to set up factories in the U.S. It's not only global competition that squeezes their margins. A patchwork of state and federal laws often restricts how much insurance plans in the U.S. can reimburse for generic drugs.
MURPHY: We don't pay enough for generic drugs in the United States for anyone to make the kind of investment that would be necessary to build new facilities in the U.S.
FORTIER: Neil Smoller (ph), a pharmacist and owner in Woodstock, New York, says talk of tariffs makes him feel panicky.
NEIL SMOLLER: How do I solve the problem of caring for my community, but not being subject to the emotional roller coaster that is dispensing hundreds of prescriptions a day and watching every single one of them be a loss or 12 cents profit?
FORTIER: Smoller says owning and operating a local pharmacy isn't the sustainable business it used to be. And if tariffs on any prescription drugs materialize, independent pharmacies already on the brink will fail.
FADEL: That was reporter Jackie Fortier with our partner KFF Health News. Transcript provided by NPR, Copyright NPR.
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