CBS News MoneyWatch correspondent Kelly O'Grady joins "CBS Mornings" to break down how much drug prices will be impacted as pharmaceutical tariffs go into effect Wednesday. The tariffs come as President Trump announced plans to launch "TrumpRx" – a new way to buy certain drugs at a discounted price.

Washington

The United States has implemented new tariffs on many branded and patented prescription drugs, with rates set at 100% for most imports. However, generic drugs, which make up over 90% of US prescriptions, are not affected, and agreements with the European Union and Japan have capped tariffs on most drugs from those regions at 15%. Companies investing in US manufacturing, such as Pfizer, are also exempt for a period of three years. Pfizer has committed to a $70 billion investment in US facilities and will offer Medicaid patients its drugs at the lowest international prices. Additionally, a new direct-to-consumer website, TrumpRx, will launch with Pfizer as its first partner, offering some medications at a 50% discount, though most Americans may not benefit directly due to insurance coverage structures. Consumer advocacy groups have welcomed these measures as a positive step for patients facing high drug prices.

What Americans can expect as pharmaceutical tariffs take effect

New tariffs on many prescription drugs are taking effect. Those import taxes on branded and patented drugs are set at 100%, but there are exceptions. At the very same time, the president is offering Americans a new way to buy drugs at a discount. Money Watch correspondent Kelly O'Grady is with us once again. Kelly, good morning. What kind of change in drug prices are we likely to see with these tariffs? Good morning to you. So the pharma industry warns it could mean higher prices for Americans, but analysts that we've spoken to suggest the impact won't be that large for three reasons. First, the tariff won't hit generic drugs, which account for more than 90% of medications in the U.S. Additionally, deals with the European Union and Japan, of course, both major sources of pharmaceuticals, have capped tariffs on most drugs at 15%. Finally, any company that has broken ground or is in construction at a U.S. manufacturing facility is exempt. Now, one company doing just that is Pfizer. President Trump announced the drug maker will invest $70 billion in American manufacturing and research facilities. In exchange, it avoids those pharma tariffs for three years. As part of the deal, Pfizer will also sell its drugs to Medicaid patients for the lowest price available in other developed nations. Now, the White House also announced TrumpRx. That's a direct-to-consumer website where Americans can get medicines at a discount beginning early next year. Pfizer is the first partner and says it will sell many of its drugs at a 50% savings on that site. Now, industry critics argue most Americans won't reap the benefits. Why? Most patients obtain drugs through insurance providers. With TrumpRx, it appears that consumers will need to pay out of pocket. Regardless, consumer advocacy groups call this a win for patients when U.S. drug prices are nearly three times more than other countries. All right, Kelly O'Grady, breaking it down as only she can. Thank you.

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