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What Will Tariffs Mean for Testosterone? Preparing for the Potential Impact on HRT

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Long gone are the days of local mom and pop pharmacies serving the entire town in the US. We now live in an increasingly globalized world, and the ripple effects that international trade policies can have may be felt in unexpected corners, even when it comes to the personal health and wellness industries, whether you’re a supplier, provider or patient. For men and women undergoing Testosterone Replacement Therapy (TRT) or Hormone Replacement Therapy (HRT) or those just considering it, recent talks in the news media about President Donald J. Trump and his recent tariffs might seem distant from their daily medical regimen, however, trade tariffs on pharmaceutical ingredients, particularly active pharmaceutical ingredients (APIs) and excipients, may eventually have quite a serious impact on the both the accessibility and affordability of testosterone and other hormone replacement therapy medications.

In the United States, our reliance on international pharmaceutical partners and suppliers is undeniable. A huge portion of the world's APIs, the core chemical compounds that give medications their therapeutic effect, are manufactured in countries like China and India. Essentially, API’s are the "drug" part of the drug. All medications, whether prescription or over-the-counter (OTC), contain one or more APIs. Medications like Acetaminophen, Ibuprofen, Amoxicillin, Atorvastatin, Levothyroxine, Metformin, Gabapentin and Testosterone are just a few examples of API’s made in countries like India and China with Inda being the largest manufacturer producing over 35% of the global supply. It's estimated that the US imports 80% of all medications. Unfortunately, our reliance in America on international sourcing means that any barriers to trade, like tariffs, imposed by pharmaceutical companies or the importing nations where they operate could instantly translate into increased costs of goods and potentially cause disruptions down the road in the supply chain, similar to what we saw in 2020 with COVID. Hopefully there won’t be a shortage of toilet paper however medications like testosterone may be impacted.

Let's look more into what this could potentially mean for medications like testosterone, both in its generic form and as a raw material/ingredient for compounded medications, which play a major role in personalized hormone therapy. Compounding pharmacies are a major supplier of medications to HRT patient and the industry is valued at over 10 billion annually, so there is a huge financial stake in their ability to operate, manufacture and dispense medication to the patients and providers that depend on them.

The Direct Hit: The Increased Cost of Raw Materials to Pharmacies

The biggest, most immediate and clearly the most obvious consequence of any tariffs placed on raw pharmaceutical ingredients and API’s would be an increase in the cost of raw materials. If sugar, milk and flour prices go up, one would expect the cost of a cake to increase as well. It’s the same thing with medications. Compounded pharmacies, which specialize in creating customized medications tailored to individual patient needs, are particularly vulnerable here. Compounding pharmacies frequently import the APIs they use as well as the excipients they add to create the finished pharmaceutical product from a diverse range of global suppliers like Europe, China and India. If these nations or companies get tariffs levied on them or the components used in making these drugs, then the cost of acquiring them will inevitably rise as will the overall cost in obtaining them either for cash pay or even through insurance. It’s estimated that around 10-20 major U.S. firms are actively producing API’s either for their own finished products or as contractors.

So, let’s think about the journey that testosterone makes to get to the patient. It starts its journey as a chemical precursor to eventually be turned into a usable medication. Whether it's injectable or transdermal creams, testosterone cypionate, enanthate, or propionate, the foundational API has to be manufactured, almost entirely overseas, and then imported into the United States. Tariffs would add a percentage directly onto the imported cost, a financial burden that would ultimately need to be absorbed or passed on down the line. The importer will increase the cost to the pharmacy, and the pharmacy to the patient.

For some of the larger generic pharmaceutical manufacturers, the impact is similar. While they might be able to operate on a larger scale, their reliance on internationally sourced APIs remains the same. If their costs to import and then manufacture increases because of increased costs like tariffs, then the  wholesale price of generic testosterone products will likely follow a similar increase thus making it unaffordable to many and may even have the unattended effect of leading to the rise of unlicensed and illegal online pharmacies where there is no oversight and there are significant health risks to the patients. Having a choice between Generic, commercial and compounding medication is important for patients.

The TRT Patient's Wallet: Higher Costs for Medications

The increased costs on importing raw materials and manufacturing won't end at the pharmacy counter; it’s going to inevitably trickle all the way down to the patient. Compounded pharmacies will be facing higher overhead costs of goods and would most likely need to adjust their pricing for customized testosterone medications. This likely could make Testosterone replacement therapy, which is often a long-term treatment for most men, less affordable for many patients. For some patients, the difference might be negligible, but for others on fixed incomes or who don’t have any financial relief from their insurance coverage, even a slight increase in costs might pose a very real barrier to ongoing affective treatment. The risk is that many patients might reduce their dose to make their medication last longer, ultimately self-prescribing in an effort to save some money and will most likely reduce the effectiveness of their therapy.

The generic testosterone market is a popular choice for most patients, instead of paying for their “brand name” counterparts made by pharmaceutical industry giants. The industry has grown in popularity due to its competitive pricing, affordability and accessibility, and will most likely also feel a financial squeeze due to potential tariffs. Generic drug manufacturers operate on notoriously thin margins. If tariffs make their import costs too high, they may be forced to raise their prices to stay in business, potentially eroding the cost advantage that makes generics so vital for patients in need of affordable healthcare.  Patients without insurance or on treatments that are not covered under their plans would be most at risk. This could lead to a scenario where patients are faced with more expensive options, or in worst-case scenarios, a lack of available affordable alternatives similar to what we are seeing in the GLP-1 space.

Supply Chain Instability and the Specter of Shortages

Another unforeseen problem associated with tariffs is consumer fear and uncertainty, Global supply chains are complex and when people sense change or get afraid of what may happen in the marketplace, there can be unforeseen negative consequences associated with the element of instability that they can create. Relationships that were years in the making with local importers or international suppliers may become strained or possibly even broken if tariffs make imported goods financially unfeasible. This could potentially force compounded pharmacies and generic manufacturers to scramble last minute for alternative sources without the proper time to vet their services or look into their legitimacy. The challenge in finding new suppliers that meet the stringent quality standards rewired by the FDA and regulatory bodies in the pharmaceutical industry, offer competitive pricing, and have facilities and processes in place to meet sufficient production capacity demands is not so easy. If you want to see for yourself, perform a simple google search for a company that supplies raw testosterone and see what you can find. This process can lead to delays in ordering and receiving the necessary supplies and ingredients, which will result in longer wait times for prescriptions to be manufactured and filled. In the most severe cases, it could possibly trigger outright shortages of certain testosterone formulations or compounded preparations if the supply can’t keep up with demand. Nationwide shortages are certainly possible and something we’ve seen before. Once again, look no further back to 2020 when it was nearly impossible for physicians and clinics to obtain a simple medication like lidocaine for basic in clinic procedures due to a nationwide shortage and backorder. Imagine the individual frustration and potential health implications for those patients whose consistent TRT regimen suddenly stops because of a tariff-induced shortage.

Increased Pressure on Profit Margins and Business Operations

Compounded pharmacies often pride themselves on personalized service and attention to detail for physicians and patients, however they are still a business and their goal is to make money. Its already difficult for them to stay in the black with the costs of testing and maintaining operations so with the potential of rising costs due to tariffs squeezing profit margins they will most likely need to increase their costs in order to survive. While some costs will probably be passed on to patients, pharmacies may also absorb a portion to remain competitive with the large pharmaceutical companies or just out of a commitment to patient affordability. This unexpected reduction in profitability for a business may hinder their ability to invest in the business and obtain needed upgrades in things like new equipment, their ability to expand services and offer new products or even maintain current staffing levels. In a challenging economic climate, tariffs may even force layoffs or require employees to come in to work longer hours without pay. The pressure on smaller, “mom and pop” independent compounding pharmacies is even greater than the larger operations further putting a strain on provider, patients and pharmacists locally within communities across the country.

Is Domestic Production Near?

One of the goals in implementing tariffs is to incentivize domestic manufacturing and cut our reliance on foreign countries when it comes to providing the U.S. population with necessary products and materials like medicine. The idea behind tariffs is that by making imported goods more expensive, it becomes more viable for entrepreneurs, investors and companies to produce and manufacture goods within the tariff-imposing country. In theory, this could lead to a resurgence in US-based API manufacturing for drugs like testosterone with existing companies ramping up production and investing in U.S. based jobs and resources. This sounds like a good thing, but not at the expense of a sustained period of increased goods or even a shortage.

Unfortunately, the reality of pharmaceutical manufacturing is extremely complex and isn’t as easy as constructing a building and starting up manufacturing. Experience, training, people and procedures often take many years to obtain and perfect before a safe and approved final product can be produced and distributed. The construction of new API manufacturing infrastructure and operating plants in the United States requires a massive capital investment, adheres to some of the worlds strictest regulatory requirements, and will take many years to come online which may require increased costs unless there is some government subsidy in place which ultimately increases the deficit and these costs often get passed down to tax payers anyway. A recent article in Reuters claims that there will be a 51 billion dollar increase in pharmaceutical costs. The costs of things like labor, environmental regulations, and regulatory compliance in the US are also significantly higher than in many other countries that few organizations are willing or able to take on this daunting task. Therefore, while tariffs may in theory create a long-term incentive to build USA based manufacturing, they aren’t very likely to provide immediate or even medium-term relief in terms of U.S. domestic testosterone API production. The short-to-medium term impact on the industry would almost certainly be an increase in both costs and potential supply disruptions.

The Broad Implications for Healthcare Access for Men and Women on HRT

At the end of the day, imposing tariffs on pharmaceutical ingredients for medications like testosterone carries broader implications for healthcare access for patients and providers. Despite some people’s misconceptions about testosterone, TRT is not an unnecessary  cosmetic treatment. For many patients, TRT or HRT addresses a legitimate medical condition like hypogonadism for example, that can significantly impact and improve a patient's quality of life, energy levels, mood, bone density, muscle mass, and sexual functioning. If tariffs make these medications and therapies more expensive or difficult to get, it could possibly lead to:

• Undertreatment: Men who need TRT or women who need Bio-Identical Hormone Replacement therapy may forgo receiving treatment due to the higher costs, leading to continued or worsening symptoms.
• Health Deterioration: Interrupted or inconsistent treatment could not only lead to a return of the symptoms that lead the patients to treatment but potentially exacerbate and worsen the underlying health issues related to low testosterone or hormones which caused the patient to seek treatment to begin with.
• Increased Health Disparities: The reality of higher costs in medications would disproportionately affect those individuals with lower incomes or who have limited insurance coverage, widening gaps in existing health disparities.

So essentially, while tariffs are widely used as a policy tool of international trade, their potential impact on the pharmaceutical sector, and specifically on medications like testosterone and the people who depend on them, is far from abstract. They pose a very real and tangible threat of not only increased costs, disruption to global supply chains, and reduced patient access for men and women. For those men who rely on Testosterone therapy, these trade decisions could mean significant difficulties in the very near future in managing their health and well-being. As these policy discussions, negotiation s and decisions evolve, it's vital to carefully and thoroughly consider and evaluate what the potential consequences for these essential medications will be in order to ensure that life-improving therapies remain accessible and affordable for all of the patients who need them.

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