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Tariffs on pharmaceuticals would harm supply chains that ensure we have enough medicines while threatening America’s security, economy, and biotech leadership, the Biotechnology Innovation Organization (BIO) explains in comments to the Department of Commerce.
A carefully maintained global supply chain based on cooperation with trusted trading partners and incentives for biotech development in the U.S. would be more beneficial for the industry and the country, BIO says.
The comments, sent May 7, are BIO’s official response to a call for public input into an investigation of the feasibility of applying tariffs to pharmaceuticals, being conducted by the Commerce Department under Section 232 of the Trade Expansion Act.
As BIO notes, thorough research by the department will reveal that a complex global supply chain enables our current ability to access the best medicine and maintain a resilient biotech industry.
“This investigation presents a critical opportunity to examine the intricacies of biotechnology supply chains and chart a path forward that strengthens national resilience while keeping the United States at the forefront of scientific innovation,” according to the comments.
BIO’s comments underscore the importance of biotech for our national security: “The sector enables rapid responses to pandemics, helps meet urgent healthcare needs, protects the food supply, and defends against bioterrorism threats.”
The comments explain that this security is made possible through U.S. global biotech leadership, which also boosts the economy and ensures that American patients have access to drugs they need. All these advantages are already under threat, and tariffs would increase that threat, BIO warns.
“Without targeted action, the U.S. risks falling behind as geopolitical competitors make aggressive investments in biotechnology and biomanufacturing to challenge U.S. dominance in the global bioeconomy,” the comments say.
BIO’s comments provide an informative and detailed explanation of the state of the U.S. biotechnology industry, the supply chain, and the impacts that tariffs would have. BIO also offers recommendations on the best ways to support growth of the U.S. industry.
A complex supply chain makes reshoring a challenge
“The U.S. biotechnology sector depends on a highly complex, interdependent global supply chain,” according to BIO’s comments. “Disruptions at any point, whether logistical, regulatory, or geopolitical, can jeopardize patient access to life-saving therapies and undermine the innovation ecosystem that drives the sector.”
Restructuring this supply chain to bring manufacturing from overseas locations to the U.S. would be a major undertaking.
“New facilities can cost up to $2 billion and take five to ten years to become fully operational,” BIO’s comments explain. “Immediate reshoring risks disrupting patient access and delaying critical research and development (R&D).”
U.S. drug makers currently rely heavily on Contract Development and Manufacturing Organization (CDMOs). The small biotech startups that drive much of the innovation in medicine lack their own infrastructure, and can’t easily replace CDMOs.
While components of drugs are often made overseas, BIO notes, there is still robust drug manufacturing in the U.S.
“Notably, most medicines consumed in the United States are already made in the United States. Nearly two-thirds of U.S. pharmaceutical consumption is manufactured domestically across more than 1,500 facilities nationwide,” the comments explain.
And more development is planned.
“Our members are already investing in America’s future: more than $500 billion has been pledged toward domestic manufacturing, building on five years of increased investment largely driven by the pro-growth tax environment created by the 2017 Tax Cuts and Jobs Act,” BIO’s comments note.
The threat of tariffs
Changes in the biotech development ecosystem take time. Abrupt imposition of tariffs on the complex global supply chain therefore would have negative consequences on U.S. biotech leadership.
“In the context of the biotechnology sector—a field defined by long development timelines, high upfront costs and deep global integration—tariffs would have unintended and far-reaching consequences,” BIO’s comments say. “Tariffs would increase production costs, disrupt research and clinical development, limit access to medicines, and slow the growth of domestic manufacturing. In practice, tariffs would weaken America’s global biotechnology leadership.”
BIO estimates that a 25% tariff would mean an additional $50 billion or more in costs for the industry, including $15 billion specifically for inputs. These costs could weaken U.S. biotech R&D, slowing the development of new treatments and causing national security concerns.
“Biotechnology is our first line of defense against biological threats—both natural and man-made,” BIO says. “Tools such as synthetic biology, rapid diagnostics, and platform technologies have enabled the U.S. to quickly detect pathogens, develop life-saving medical countermeasures, and scale up biomanufacturing during times of crisis.”
Patients would also be impacted.
“Tariffs on biopharmaceutical imports would ultimately harm patients by driving up the cost of both critical inputs and finished therapies,” according to the comments.
Some drugs might simply cease to be available in the U.S.
“Historically, the U.S. has exempted pharmaceuticals from tariffs to protect public health and uphold ethical commitments to patient care—principles that remain just as urgent today,” BIO explains. “Patients with rare diseases or complex conditions would be among the most severely affected. Many therapies, particularly orphan drugs, are produced in single facilities abroad, often in allied nations such as the EU.”
Policy recommendations
Ensuring continued supply of medicine, U.S. security and economic benefits requires an approach that does not burden supply chains with tariffs, BIO explains: “A forward-looking strategy must focus on building domestic resilience while deepening cooperation with trusted international partners.”
To achieve this, BIO makes several recommendations:
Support the domestic manufacturing and services ecosystem, including through key policy mechanisms, such as reauthorization of the Tax Cuts and Jobs Act (TCJA) and improving corporate tax Incentives.
Reinforce and expand global trade cooperation: “Securing the U.S. biopharmaceutical supply chain requires expanding global collaboration,” through partnerships and bilateral arrangements that enable shared costs, reduced duplication, and secure diversified inputs, while meeting domestic and global demand.
Develop the workforce: This includes supporting science and biotech education, incentivizing employers to invest in training, and other measures to grow a workforce with the advanced skills the biotech industry needs.
Expedite regulatory and permitting pathways: To avoid unneeded regulatory costs and speed development of new treatments, BIO urges “commonsense reforms that uphold environmental protections and public health while enabling timely facility construction and production scale-up.”
Improve access to capital: Federal grants—especially for early drug research that takes place before it is clear investment could yield returns—come from the National Institutes of Health (NIH) and Small Business Innovation Research (SBIR). Legislation promoting capital formation that passed the House in the previous Congress includes H.R. 2797, to allow an expanded pool of accredited investors; and H.R. 2792, to prevent stock fluctuations from forcing small firms to take on unnecessary, expensive reporting requirements.
Develop regional manufacturing hubs: “Federal and state governments should incentivize the creation of regional biomanufacturing hubs” that can “anchor ecosystems of innovation, workforce development, and local supply chain resilience.”
Encourage strategic technology leadership: “Next-generation technologies like artificial intelligence, automation, and molecular engineering are poised to revolutionize biotechnology innovation,” BIO notes. “These tools enable faster drug discovery, more efficient manufacturing, real-time data analysis in clinical trials, and the design of novel therapeutics that were previously unimaginable. The nation that leads in deploying these technologies will not only dominate the future of biotech but also shape the trajectory of adjacent strategic sectors—such as defense, agriculture, energy, and advanced materials.”
