Healthcare > Medicine

The Next Baby Formula Crisis: Medicine Tariffs

America has a habit of learning the wrong lesson from the right crisis.

Julio Rivera | April 25, 2026

America has a habit of learning the wrong lesson from the right crisis.

In 2022, American parents drove across state lines, refreshed store apps at 2 a.m., and paid absurd markups just to find baby formula. The shelves did not go empty because demand suddenly spiked. They went empty because the system was brittle, overconcentrated, and completely unprepared for a single failure. That episode should have been a warning about what happens when a critical supply chain is narrowed down to a handful of protected players. Instead, Washington now seems ready to recreate that same structure in a far more consequential arena: medicine.

The Trump administration’s push to impose tariffs on pharmaceutical imports, including plans for aggressive action on branded drugs, has already begun to reshape the conversation. What should concern policymakers even more is the growing appetite to extend similar restrictions to generic drugs, which represent 90% of prescriptions in the United States.

Senator Rick Scott, for example, has leaned into the idea of tightening the system in the name of national security. The tariffs on generics may be delayed for now, but the next steps of this agenda are clear.

Because if those policies move forward without meaningful safeguards, the United States will not be securing its drug supply. It will be concentrating it. And concentration is where things start to break.

Generic drugs are the backbone of the American healthcare system. Generic antibiotics, anesthetics, and emergency injectables keep hospitals running and routine care possible. The United States simply does not have the manufacturing depth today to replace global supply at the scale on which patients rely.

Countries like India have become essential partners in producing affordable generics, and that relationship has provided stability through diversification. Remove or severely restrict that supply, and the gap does not magically fill itself. Instead, it shifts power toward whoever is left standing.

Building the capacity to fill that gap takes years of capital investment, regulatory approvals, workforce development, and supply chain coordination.

Right now, that capacity does not exist.

A small group of domestic manufacturers is currently positioned to benefit. Companies such as USAntibiotics, PAI Pharma, Nexus Pharmaceuticals, and Phlow Corp all operate in critical segments of the market. They play an important role, particularly during shortages, but they are not equipped to replace the scale of global supply, nor are they insulated from the same economic pressures that affect any industry.

It appears that some of the owners of these companies know they can stand to benefit from more market concentration and government incentives.

Take Usman Ahmed, the CEO of Nexus Pharmaceuticals, for example. He sits on the board of a major reshoring advocacy group that has called to restrict medicine imports and produces reports to strengthen that argument. On the other side, government investment can help, but it does not guarantee performance. Phlow Corp, for example, asked for and received substantial federal support to rebuild domestic production capacity but struggled to meet key milestones. In an overly protected market, the discipline imposed by competition begins to fade, and incentives start to shift in ways that are not always aligned with patient outcomes.

Tariffs do not just limit imports. They can possibly reshape the structure of a market. They also can reduce competition, increase pricing power, and gradually create an environment where being indispensable matters more than being efficient. That is precisely the kind of environment that led to the infant formula shortage, where a heavily protected domestic system collapsed under the weight of a single failure and left mothers scrambling.

Now imagine that same dynamic applied to antibiotics or epinephrine.

None of this requires bad intentions. It only requires predictable incentives.

Unlike branded pharmaceuticals, generic drugs operate on extremely thin margins. When tariffs are imposed, those costs do not disappear. They move through the system, landing on patients, insurers, and healthcare providers. Higher prices lead to difficult choices, delayed refills, skipped doses, and in some cases, avoidable medical emergencies. The ripple effects extend far beyond the pharmacy counter.

Making America’s medicine supply chain more reliable does not require dismantling the system. It requires tightening. In other words, build the capacity first. Then consider the next steps.

Diversifying supply chains across allied countries, reducing dependence on Chinese active pharmaceutical ingredients through coordinated investment, and encouraging foreign manufacturers to establish and expand their U.S. footprint would strengthen resilience without introducing unnecessary risk. Countries like India are already scaling production of key inputs, not by isolating themselves, but by expanding within a global system, and their companies are even building new capacity in the United States. There is no reason America cannot do the same while still protecting its strategic interests.

Resilience is built through depth and flexibility, not through isolation. The baby formula crisis was not an anomaly. It was a preview.

The question now is whether anyone in Washington is willing to admit it.

Julio Rivera is a business and political strategist, cybersecurity researcher, founder of ItFunk.org and ReactionaryTimes.com, and a political commentator and columnist. His writing, which is focused on cybersecurity and politics, is regularly published by many of the largest news organizations in the world. 

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