President Trump is due to announce new policies for controlling medical expenses prices, Reuters reports, in a speech delayed from later in the year. That follows a series of suggestions from the Council of Economic Advisors launched earlier in the year, as outlined in Panjiva research of February 12. Overseas sourcing of pharmaceuticals is likely to form part of the solution, though it is worth noting that pharmaceuticals are part of the list of Chinese products that could face additional duties under the section 301 review of IP rights.

The cost of imported drugs has been rapidly decelerating, even though imports overall have been expanding. Panjiva data shows U.S. imports of pharmaceuticals climbed 9.3% in the first quarter vs. a year earlier, reaching the second highest on record at $7.04 billion in March. Yet, the average import value per gram dropped 20.6% over the same period, likely due to competition in the generic drugs sector. On a 12 month average basis average import values per gram are at their lowest since at least 2010.

Chart compares U.S. pharmaceutical imports (HS 3004) by value and volume, lower panel shows value per kilo on a monthly (dotted) and annual average (solid) basis. Source: Panjiva

The exception to the rule has been oncology (cancer) treatments, which represented the single largest drug class at 27.7% of the total in the first quarter. Imports of the class as a whole surged 47.6% higher in the first quarter in dollar terms, accelerating from 14.8% in the prior nine months.

That included a significant hike in average import values per gram – a proxy for end-customer prices – that jumped 29.7% over the same period. That surge may, as is the case across many international supply chains, may reflect a bid to maximize profits before restrictions of some sort come into place.

Chart compares U.S. imports of oncology and immunological drugs by value and volume. Right hand panel shows value per kilo on a monthly (dotted) and annual average (solid) basis. Source: Panjiva