Rising API Tariffs Are Forcing Pharma to Shift R&D Resources

In a recent video interview with Applied Clinical Trials, Ron Lanton, partner, Lanton Law, discussed the impact of drug cost increases on clinical research, predicting a reduction in government-sponsored trials due to higher R&D costs and potential funding cuts. Lanton also touched on FDA inspection cuts and how they are expected to slow down the clinical trial supply chain, leading to longer approval times and reduced site readiness.

ACT: How could the threat of tariffs impact the active pharmaceutical ingredients (APIs) market? Could this increase the cost of conducting clinical trials?

Lanton: I think tariffs on APIs will definitely increase costs to everybody who has touch points in the supply chain. Pharma obtains a significant amount of APIs from the global market, and I think that's going to lead to increased expenses and a lot of difficulties in sourcing essential ingredients that we need for the APIs. I think the companies might respond to these challenges by reallocating resources meant to maintain or maybe accelerate their R&D pipelines in order to address the issues, but I definitely think it's going to result in an increase of cost.