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LUGPA Policy Brief: Tariff Escalation and Implications for Urology Practices

September 2025

On September 5, 2025, President Donald J. Trump signed an Executive Order (EO) revising reciprocal tariffs and creating a framework for future trade negotiations. Just days later, the administration announced a sweeping new measure: a 100% tariff on imported branded and patented pharmaceuticals, effective October 1.

Together, these actions significantly expand the scope of tariff policy in healthcare. While the administration frames these moves as strategies to rebuild U.S. manufacturing and secure supply chains, they also introduce immediate cost pressures, investment uncertainty, and risks of supply disruption—particularly for independent urology practices.

Key Tariff Changes

1. New 100% Tariff on Branded Pharmaceuticals

  • Starting October 1, all branded and patented pharmaceutical imports will face a 100% tariff.
  • Exemptions:
    • Generic drugs (which account for 90% of U.S. prescriptions) are excluded.
    • Companies with in-progress or new U.S. manufacturing facilities (“breaking ground” or “under construction”) qualify for exemptions.
    • Japan and South Korea are shielded through trade-deal protections.
  • Market Impact:
    • European drugmakers such as Novartis and Roche expect minimal impact due to ongoing U.S. facility expansions.
  • Industry Response: PhRMA and major drugmakers warn that tariffs will divert investment away from research and development and increase U.S. consumer costs.

2. Exemptions Added in the EO

  • Preserves and expands protections for certain pharmaceuticals, bullion-related articles, and critical minerals under Section 232 review.
  • Most APIs and urology-specific drugs were not included.

3. Exemptions Removed

  • Aluminum hydroxide, resin, and silicone products—vital to catheters, implants, tubing, and surgical instruments—were stripped of tariff protections.
  • Manufacturers will face higher production costs, increasing downstream supply costs for practices.

4. PTAAP Annex (Pharmaceutical Tariff Adjustment and Access Process)

  • Establishes conditional tariff reductions for generics and ingredients if U.S. trading partners agree to reciprocal concessions.
  • Implementation hinges on international negotiations that could take years.

5. Continuation of Existing Tariffs

  • Sustains tariffs on imports from China, India, Mexico, Canada, and Brazil, which supply a majority of APIs, generics, and device components critical to urology.

Implications for Urology Practices

Urology practices rely heavily on imported drugs, APIs, and device components. The combined EO and 100% tariff policy creates a mix of immediate pressures and long-term uncertainties:

  • Higher branded drug costs: Urologic medications still under patent protection could see significant price hikes unless manufacturers qualify for exemptions.
  • Device supply cost increases: Removal of exemptions on resins, silicones, and aluminum hydroxide will raise the cost of surgical supplies and implants.
  • Generic drug stability—but with caveats: While generics are excluded from tariffs, future relief under PTAAP depends on lengthy trade negotiations.
  • Short-term buffer, long-term risk: Analysts suggest drugmakers have stockpiled inventory ahead of tariffs, blunting near-term impacts, but shortages and price spikes could surface in 2026.
  • Reimbursement mismatch: Rising input costs are unlikely to be matched by Medicare or private payer adjustments, tightening margins for smaller independent practices.

Looking Ahead

The administration’s tariffs introduce significant uncertainty into drug pricing and supply chains. While loopholes and exemptions may blunt the near-term impact, independent practices remain especially vulnerable to the ripple effects of cost increases and delayed access.

LUGPA will:

  • Monitor the rollout of the 100% pharmaceutical tariff and its exemption process.
  • Advocate for broad medical exemptions covering essential drugs, APIs, and device materials.
  • Educate policymakers on the disproportionate impact on independent practices, which lack the purchasing power of large health systems.

Through continued advocacy, LUGPA is committed to ensuring tariff policies do not undermine patient access to affordable and timely urologic care.