Comment Letter on Section 232 Investigation

Dear Secretary Lutnick,

The Duke-Margolis Institute for Health Policy appreciates the opportunity to comment on the investigation initiated under Section 232 of the amended Trade Expansion Act of 1962 regarding the effects on national security of imports of pharmaceuticals and pharmaceutical ingredients.

This comment from Duke-Margolis researchers has been informed by the Duke-Margolis ReVAMP Drug Supply Chain Consortium, which consists of a group of experts in supply chain, manufacturing, regulatory science, national security, and drug shortages from academia, private industry, and additional relevant stakeholder groups1. The Consortium’s mission is to generate effective policy solutions that promote a reliable drug supply chain with advanced manufacturing capabilities and, ultimately, to improve patient outcomes by reducing the frequency and severity of drug shortages.

Multiple interrelated policy aims are relevant to this Section 232 investigation, including addressing geopolitical risks arising from concentration of pharmaceutical manufacturing in high-risk countries, onshoring domestic pharmaceutical manufacturing capabilities, and providing protection from intellectual property theft and malicious use of advanced technology.

Many policy tools are available that could potentially help to achieve these aims, including tax policy, reimbursement and payment reform, domestic purchase preference, direct investment in industrial base expansion, tariffs, and restrictions on foreign use of critical technology. As described below and in our recent Health Affairs article, broad tariffs on pharmaceuticals are likely to be ineffective or counterproductive in many cases, while also causing negative impacts to patients through manufacturer discontinuations and drug shortages. We urge a cautious, targeted, and step-wise approach that matches specific policy aims with the tools best suited to achieve them while avoiding negative consequences to patient care.

In the remainder of this comment letter, we outline 1) the conditions that must be in place for tariffs to be successful in achieving policy aims, 2) details on proposed vulnerability assessments to enable effective targeting, and 3) other policy approaches that may be preferable to tariffs.

Read the full letter