KUALA LUMPUR, April 9 — The United States will soon announce a “major” tariff on imported pharmaceuticals, said President Donald Trump.
Seemingly reversing an earlier decision to exempt pharmaceuticals from the US’ reciprocal tariff announced last April 2, Trump said this would incentivise drug makers to move operations to the US.
“We’re going to be announcing very shortly a major tariff on pharmaceuticals. When they hear that, they will leave China, they will leave other places, because most of their products are sold here,” said Trump at an event at the National Republican Congressional Committee today.
According to a 2023 report by the Ministry of Investment, Trade and Industry (MITI) on the pharmaceutical industry, the US was Malaysia’s largest export destination for pharmaceuticals in 2022 at RM500 million (17.9 per cent), followed by Singapore (RM400 million, 12.5 per cent), Australia (RM200 million, 7.1 per cent), Brunei (RM200 million, 7.1 per cent), and China (RM100 million, 4.4 per cent).
In 2022, the main exported products of Malaysia’s pharmaceutical industry were medicaments in measured dosage forms (RM700 million), insulin in measured dosage forms (RM400 million), placebos and blinded or double-blinded clinical trial kits (RM400 million), glycosides (RM300 million), and dressings and other articles with adhesive layers (RM300 million).
A tariff on US pharmaceutical imports may also have an indirect impact down the supply chain on innovative drugs procured by both public and private health care providers in Malaysia from the US, even without a retaliatory tariff from Malaysia.
This is because many multinational pharmaceutical companies have manufacturing facilities outside the US to cater to global demand.
Medical inflation has been a top health care issue in Malaysia for months, primarily rising health insurance premiums and private hospital charges. Medicines comprise a small portion of hospital bills, while 70 per cent of the bills are unregulated.
