How Tarriffs May Impact Your Medical Costs

Transcript Generated by AI.

Announcer: 0:00

Welcome to the MedEvidence! Monday Minute Radio Show hosted by Kevin Geddings of WSOS St Augustine Radio and powered by ENCORE Research Group. Each Monday morning, Dr. Michael Koren calls in to bring you the latest medical updates with insightful discussions. MedEvidence! is where we help you navigate the real truth behind medical research, with both a clinical and research perspective. So sit back, relax and get ready to learn about the Truth Behind the Data in medicine and healthcare. This is MedEvidence!

Kevin Geddings: 0:30

Dr. Michael Koren, as promised, joining us live on the studio line. Dr. Koren, of course a medical doctor, cardiologist, research scientist also heads up the show at ENCORE Research Group and they do clinical research, leading-edge clinical research. Today we thought we would talk about medicines and how they could be impacted by all these tariffs that are buzzing around Washington, right, Dr. Koren?

Dr. Michael Koren: 0:51

Yes, yes, you and I were just chatting about the discussions that we had around the holiday table over the holiday weekend, and I think a lot of families probably talk about tariffs and how they might affect your day-to-day budget and your life over the course of the next several months to years?

Kevin Geddings: 1:07

Yeah, absolutely. So it turns out that even items like Tylenol that people could maybe use quite frequently are tied to foreign development right.

Dr. Michael Koren: 1:17

Yeah, yeah. So people probably have a sense for it, but don't know the magnitude of it that a lot of the pharmaceuticals both prescription pharmaceuticals and over-the-counter pharmaceuticals come from overseas, and there's a lot of reasons for it. Some of them, quite frankly, are not great reasons, and I think the administration is trying to address some of those issues, but by doing it so quickly it creates a lot of turmoil. So, for example, there's a lot of manufacturing of US pharmaceuticals in the country of Ireland, which is a country of only about 5 million people, and literally the US pharmaceutical industry hires tens of thousands of people in Ireland because of a tax break that they get when they manufacture in Ireland. So drugs, for example, Mounjaro are primarily manufactured in Ireland, or Botox is primarily manufactured in Ireland. So I think I read somewhere that 90% of the world's Botox supply comes from Ireland. You never know that.

Dr. Michael Koren: 2:15

So right now, the tariff on these drugs is probably similar to what the overall EU tariff is, which is 20%, but there's a lot of noise about that going up. And of course, there's a desire of the administration to bring some of this manufacturing back to the US, and companies like Eli Lilly have already announced that they're going to do that. Eli Lilly, for example, has announced that they're going to build four new plants, but that takes time, Kevin. You can't build a plant in 90 days. So literally these are things that take years and years, and years to do.

Dr. Michael Koren: 2:43

So we'll see. There can be a lot of short-term displacement and, as far as the over-the-counter stuff, there's a lot of raw ingredients for pharmaceuticals that come out of China and, as you know, the current tariff on China is now 145 percent and may go up from there. So this will affect a lot of other manufacturers who use these raw ingredients and then sell them to the US market. So how that plays out is really uncertain. And again, these are things that can't change overnight, because it takes so much time to create a new pharmaceutical factory.

Kevin Geddings: 3:14

Right. So how soon will folks feel that? In other words, how soon do you think that people would start having to pay more for Botox or for Wegovy, or for even Tylenol?

Dr. Michael Koren: 3:26

I'm not sure. So what I do know is that, in anticipation of the tariffs, there was a lot of movement of product right before the tariffs kicked in. So hopefully there's a little bit of supply for the next several months and I'm going to imagine that consumers are going to start to see price increases for a lot of drugs and especially for the over-the-counter drugs that don't have big margins. There's not a whole lot of margin there for the manufacturers to eat, so probably over-the-counter stuff will go up in price over the next several months. But of course we don't know how all these negotiations will turn out in terms of whether or not we find common ground with our trading partners and figure out a way of avoiding the worst of the tariffs. So it's a real big unknown right now. But I will say that we're good in the clinical research industry for the moment. It is a priority in terms of drug supply. So we're okay for the moment, but it's going to be an interesting several months in terms of how pharmaceuticals are affected overall.

Kevin Geddings: 4:22

Right and indeed that is a way for folks to deal with the tariffs right. They could participate in a clinical trial and that will greatly. They won't have to suffer the impact of these tariffs and how they impact pharmaceutical costs.

Dr. Michael Koren: 4:35

Yeah, I don't want to overpromise that because, again, all of our studies are really focused on a particular niche of health, so it's not going to protect you against what could happen with all tariffs, but what it does is definitely keeps you in a pretty good place in terms of that particular question that we're addressing. And two, there's stipends that people get when they participate in these trials, so you can think of it that you're getting some money from the pharmaceutical industry to offset any impact of these increases in drug prices. So a way to kind of even the score, if you will.

Kevin Geddings: 5:09

It'll be a way to pay for your $25 bottle of Tylenol, right yeah?

Dr. Michael Koren: 5:13

Well, hopefully it won't get that bad, but it could.

Kevin Geddings: 5:16

Yeah, interesting stuff. Yeah, I think that's. You know. We always think about cars, right, Dr. Koren? We think about TVs or iPhones, and we think about tariffs and foreign products. We don't really think about the medications that we take.

Dr. Michael Koren: 5:27

No, it's a huge, huge industry and it actually affects a lot of overseas places in ways you can't imagine. So, for example, everybody knows about Ozempic.

Dr. Michael Koren: 5:38

Ozempic is manufactured by Novo Nordisk out of Denmark. Denmark's a country with like maybe five or six million people and Novo Nordisk actually employs hundreds of thousands of people in Denmark. It's by far the biggest employer and most of their products go to the US, quite frankly, because it's the most lucrative drug market, so people are scared there. Novo Nordisk stock was the most valuable stock in Europe for a couple of years now and that has since changed because of concerns about the tariffs and the impact on the US trade and how that's going to affect the US consumer.

Kevin Geddings: 6:14

Right. Is there a class of medications that we're pretty good at making here in the United States?

Dr. Michael Koren: 6:20

Well, we can make anything, and these are, in many cases, us companies. Novo Nordisk is not, but Eli Lilly is, Pfizer is, and so the know how is there, its just that building the factory is a huge undertaking. And it takes time and they're not set up. But, keep in mind that these companies were doing this to avoid paying taxes, quite frankly. And, as long as they book their profits overseas and didn't bring them back home. They didn't have to pay taxes on those sums of money, and so that could affect stock prices for the pharmaceuticals, for example, if all of a sudden they're getting taxed on these profits immediately rather than in a deferred way. So it's a pretty complicated situation, but hopefully we'll find the light of day and come up with a solution that's not so onerous.

Kevin Geddings: 7:07

That's Dr. Michael Koren once again. By the way, since I have the doctor here, we should mention that there's a big Lunch and Learn taking place on Friday dealing with migraines If you know someone or you are dealing with migraine headaches. The Lunch and Learn will be at WJCT Studios, public radio studios, right across from where the Jaguars play. This Friday free lunch gets underway at 11:30. We'll wrap up at one o'clock, right, doctor?

Dr. Michael Koren: 7:31

Yeah, it's really fascinating. Dr. Steven Toenjes is my colleague and a neurologist fabulous neurologist, incredibly smart, really very knowledgeable in migraines and I've learned a lot from him over the years on how to deal with headache issues. So I think if you have this problem or you have a family member that has this problem, it behooves you to check it out and learn more about migraines and the different solutions that are available.

Kevin Geddings: 7:54

Yeah, that event is made possible, of course, by MedEvidence! as well, which is a great platform. It doesn't cost you anything to get on there, MedEvidence. com, where you can get some good information not only about migraines, but thousands of other health-related topics. Right, doctor?

Dr. Michael Koren: 8:09

Yeah, yeah. So we're just getting more and more excited about MedEvidence! Again at the holiday table there's a lot of discussions about some of our recent podcasts with Jerome Adams, the former Surgeon General, and with Tony Fauci. And check it out, I think you'll find it interesting, and we cover lots of different topics in a very pragmatic way.

Kevin Geddings: 8:28

Yeah,MedE vidence. com, that's MedEvidence. com. You need to sign up if you can Register for that Migraine Talk, the Lunch and Learn. That's this Friday up in Jacksonville, and all you have to do is just go to wjct. org, just click on the events drop down tab and it's right there, Dr. Koren, we appreciate your time. Thank you very much. We hope you have a good day.

Dr. Michael Koren: 8:47

I appreciate it, always a pleasure, Kevin.

Announcer: 8:49

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