The Hidden Victims of Drug Tariffs: How Ohio’s Donation-Based Pharmacies Are Keeping Patients Covered

 In late September, President Donald Trump announced that brand-name or patented pharmaceutical products would be subject to a 100% tariff, effective October 1st. However, he added an exemption – companies that are breaking ground or already under construction on manufacturing plants within the United States are exempt from the tariff.

Manufacturers, suppliers, and customers could all feel the effects of the tariffs. Generic drug manufacturers are vulnerable because the active ingredients in many generic drugs are imported into the United States, and these manufacturers operate on thin margins of profit. According to CNBC, the increased costs from the tariffs might force some manufacturers to exit the U.S. market, which would inherently counteract the tariff’s goal. 

The tariff may also disrupt supply chains. Many drugs rely on a global manufacturing network and changes in plant operations may lead to a lower supply of active ingredients and thus a higher cost for importing goods.

Numerous smaller businesses, repositories, and pharmacies are preparing for the benefits and setbacks of these tariffs. In 2023, Ohio passed a law that permits the donations of unexpired medications to charitable pharmacies, hospitals, and nonprofit clinics. Over the last two years over 60 Drug Repositories have been created to collect pharmaceutical donations and redistribute them to lower-income and underserved populations. One such repository, Healing Hearts Counseling Center, distributes unopened and unused prescriptions to those who need them. 

“Thanks to the program, we have received more donations than needed, and that allows us to help even more of our clients.” Alan Mitchell, the Executive Director at Healing Hearts Counseling Center, said. 

Although the repository programs aid thousands of clients, there is still uncertainty due to tariffs and other healthcare changes that may happen in the current administration. 

“We anticipate a rise in the cost of prescription, Medicaid, and Medicare at the start of the upcoming year, and we are prepared for that rise.” Mitchell said.

The preparation comes from the repository program that was set up. Mitchell said that as part of the onboarding process, clients are asked if they would like to donate any unused and unexpired prescriptions back to the center to help those in need. 

“It is not uncommon for clients to fall through after their prescriptions are already ordered, and that leads to unused prescriptions that can be used on other underserved individuals.” Mitchell said. 

Mitchell also mentioned an amendment to the House bill that allows help and assistance to individuals with inadequate insurance, allowing for a wider scope of individuals to receive the help they need. 

While there is plenty of uncertainty from clients about the cost effects of the tariffs, Registered Pharmacist Jason Bilyj hopes the benefits of the tariffs can be seen as well. 

Bilyj, the Director of Pharmacy at Third Street Family Services, said that many pharmaceutical suppliers are already signing deals to bring generic pharmaceuticals back to the US. During the supply chain crisis, overseas pharmaceuticals were stuck and were unable to reach the United States for client distribution. Another issue with foreign pharmaceutical manufacturers is that the COVID-19 Pandemic led to a lot of backlog in regular inspections. It wasn’t until May that the FDA announced they would implement the use of unannounced inspections at foreign manufacturing facilities in an attempt to invoke the same level of scrutiny and oversight that domestic companies endure. 

In May, Executive Order 14273 was put into effect in an effort to curb prescription drug costs by reshaping how the government pays for and regulates medications. The order directs the Department of Health and Human Services to tighten and revise the Medicare Drug Price Negotiation Program, with an emphasis on transparency and targeting the highest-cost drugs. It also calls for new payment models meant to secure better value for expensive therapies, including biologics, within the next year.

To expand patient access, future federal health-center grants will be tied to making insulin and injectable epinephrine available at affordable prices to low-income patients. The White House is also pushing for faster entry of generics and biosimilars and is exploring whether more prescription drugs can safely move over the counter.

This executive order, along with the Ohio Drug Repository Program, sets an effort to serve the underprivileged and make sure all Americans have access to the help they need.

“This is not a retail organization, it’s a nonprofit organization, so there are a lot of times where we make decisions to serve the patient, no matter if it is revenue-generating or not,” Bilyj said.