Proposed tariffs threaten biotech supply chain, innovation, BIO survey warns

Tariffs could hurt biotech supply chaing: ©Timmytws -stock.adobe.com

A survey from the Biotechnology Innovation Organization (BIO) highlights the deep global integration of the biomedical supply chain and the potential risks posed by proposed tariffs on imports from the European Union, China, and Canada. According to the findings, nearly 90% of U.S. biotech companies rely on imported components for at least half of their FDA-approved products, making the supply of medicines for American patients especially vulnerable to trade policy shifts.

The survey, conducted in February 2025, reflects input from companies ranging from small startups to large corporations generating more than $1 billion in revenue. The results reveal widespread concern within the biotech industry over the impact of potential tariffs on costs, innovation, and regulatory timelines.

Tariffs could drive up costs and delay treatments

The survey found that 94% of biotech firms expect manufacturing costs to surge if tariffs are imposed on imports from the EU. These increased costs could have a direct impact on drug pricing and patient access to essential medicines, at a time when affordability remains a major concern in the U.S. healthcare system.

Further, the tariffs threaten to slow medical innovation. Half of the surveyed companies said they would need to find new research and manufacturing partners if EU tariffs take effect, and 50% reported that they might have to rework or delay regulatory filings, creating uncertainty in the drug approval pipeline.

In addition, the survey highlights logistical challenges. A striking 80% of biotech firms indicated that they would need at least 12 months to find alternative suppliers, while 44% estimated it would take more than two years—potentially stalling the development and production of breakthrough treatments.

"This survey demonstrates the far-reaching and potentially damaging impacts of the proposed tariffs on our biotechnology industry, on biomedical research, and on patients," said BIO President and CEO John F. Crowley. "We fully support strong policies and programs that incentivize the manufacture of medicines here in America. Re-onshoring key parts of the biotechnology supply chain to the U.S. and our allies and strengthening the American manufacturing base should be a high priority for both national and economic security. It will take years, though, for this shift and we need to be mindful of the negative consequences of these proposed tariffs."

Broader impact of health care-related tariffs

The concerns raised in BIO's survey align with broader trends in the medical and pharmaceutical industries, where supply chain disruptions have already contributed to drug shortages and higher costs. A 2023 report from the U.S. International Trade Commission found that previous tariffs on Chinese medical supplies led to price increases for critical items such as personal protective equipment and active pharmaceutical ingredients (APIs). Similarly, the Congressional Budget Office has warned that tariffs on medical goods could lead to increased healthcare spending by both patients and government programs such as Medicare and Medicaid.

Industry experts have also pointed to the difficulties of quickly shifting manufacturing back to the U.S. The Center for Strategic and International Studies (CSIS) noted that while strengthening domestic production is a long-term goal, the transition requires significant investment, regulatory approvals, and workforce training. In the meantime, tariffs could create supply chain bottlenecks that slow the availability of new treatments.