pLOG

2025-04-14

The Hidden Costs of Trade Wars: Potential Impact of High Tariffs on Patient Support Programs

President Trump's healthcare policies, which include cuts to Medicaid and ACA subsidies, could lead to more Americans losing their insurance. The high tariff policies will increase healthcare costs, thereby raising the demand for Patient Assistance Programs (PAPs). The goal of PAPs is to help patients with medication costs, especially for low- to middle-income families.

Ultimately, tariffs are paid by consumers

Since February, the Trump administration has imposed an additional 25% tariff on pharmaceutical ingredients, medical devices, and manufacturing equipment imported from China and other countries. These tariffs, aimed at reshaping the manufacturing sector and addressing trade imbalances, have also disrupted the entire healthcare supply chain.

According to data from the U.S. International Trade Commission, over 80% of the active pharmaceutical ingredients (APIs) used in U.S. drugs are manufactured abroad, with China and India being the major suppliers. The new tariff rates have immediately impacted the cost structure of drugs that rely on these supply chains. “When pharmaceutical companies face higher manufacturing costs, these increases are ultimately passed on as higher market prices, but they directly affect the cost and availability of medications in Patient Assistance Programs (PAPs).”

 

Mathematical Problems of Drug Accessibility

The market business strategy behind Patient Assistance Programs (PAPs) has always been a subtle economic issue. Most PAPs operate with a fixed annual budget based on pharmaceutical companies' donations, foundation funding, and other contributions. When drug costs rise, these programs face a mathematical dilemma: with the same support budget, they will either assist fewer patients or reduce the amount of assistance to maintain the same number of patients served.

For a rheumatoid arthritis (RA) patient, these changes in burden are not just statistical figures. One RA patient shared, "Without assistance, my medication costs are higher than my monthly mortgage," she said. “I was told that my PAP assistance might decrease next quarter, and that will definitely change my financial situation.”
 

Adjustments Under Future Price Pressures

atient Solution Providers must also develop new approaches to navigate the challenging environment:

Strategic Drug Prescribing: Prioritize medications with more stable supply chains or those less impacted by tariffs to ensure long-term stability of drug programs.

Transparent Partnerships: Forward-thinking patient solution providers should collaborate with pharmaceutical companies to establish long-term patient support agreements, helping to buffer the impact of sudden tariff-related cost increases.

Policy Advocacy: Advocate for price controls on critical medications and medical supplies for life-threatening and rare diseases to balance affordability.

Technological Solutions: Assist healthcare institutions in providing a wider range of benefits, including manufacturer discounts and digital platforms for multiple assistance programs, making drug availability information more transparent.

“In the face of uncertain economic policy interventions, we must be more flexible than ever, leveraging AI for predictive patient availability forecasting and collaborating more closely with drug suppliers to anticipate supply chain disruptions and price increases, enabling us to adjust our programs proactively rather than reactively.”
 

Complex Healthcare Calculations

"While tariffs may benefit the competitiveness of the U.S. pharmaceutical industry, short-term and unplanned adjustments will endanger the long-term security of the drug supply chain," said economists specializing in healthcare markets. "The timeline for expanding domestic manufacturing may far exceed the immediate phase. Building pharmaceutical manufacturing facilities that meet U.S. FDA standards typically takes 3 to 5 years from planning to production. During this transition period, citizens may continue to face the harmful effects of price pressures on their livelihoods."

For chronic disease management, where medication adherence is crucial to preventing costly hospital treatments, interruptions in access to treatment could ultimately increase the overall healthcare system's costs. The harm caused by medical expenditures due to disease deterioration from treatment disruptions could be even more significant.
 

The impact on Taiwan's healthcare and pharmaceutical supply

The 32% tariff imposed by the Trump administration on exports from Taiwan, effective from April 9, 2025 (delayed by 90 days), not only disrupts trade but may also slow Taiwan's economic growth. In February 2025, the government revised its GDP forecast downward due to the potential reduction in government budget spending caused by an economic recession. This could further impact patients' disposable income and their medical expenditures. The impact may be even more significant as it could lead to greater demand for Patient Assistance Programs (PAPs) for out-of-pocket drugs. However, for patient families experiencing a noticeable decline in income or struggling with the economic storm's impact on their livelihood, this could cause interruptions in self-funded treatments.

Furthermore, drug price increases due to the effects of the U.S. economy may lead to a decline in the national purchasing power for medications or intensify competition in the pharmaceutical supply chain. This could result in the suspension of some drug supplies to Taiwan, as was seen during the Covid-19 period, and lead to the withdrawal of certain specialty medications from the Taiwanese market.

 

Facing Challenges and Responses

For patient solution providers and those reliant on drug assistance programs, the ever-changing tariff policies still require a balanced approach. The market’s self-regulating mechanisms, along with innovative service models, are the only ways to help solve the problems and allow the market to self-adjust. This includes providing protective measures for patients who are economically disadvantaged and unable to adapt in the short term, or incorporating them into policy dialogues. Viewing patient support programs as part of the economic safety net, with businesses aligning their interests with social responsibilities as a common goal, is a mechanism under the free-market economy to ensure the continuous operation of supply and demand.