Small pharmacies stockpile drugs as tariff fears grow

Independent pharmacies across the U.S. are stockpiling generic and specialty drugs in anticipation of potential price hikes and supply chain disruptions stemming from former President Donald Trump’s ongoing push to impose tariffs on pharmaceuticals, a report from KFF Health News reveals.

While some of the tariffs have been delayed, the chaos surrounding Trump’s sweeping import tax levies has placed small businesses—including pharmacies—into survival mode, and some have turned to hoarding.

In Salt Lake City, pharmacist Benjamin Jolley told KFF he’s built a hedge against uncertainty in the basement of his pharmacy, made entirely of shelves filled with prescription bottles—nearly six months worth. It’s the only way he can think of to weather the storm of potential 10% across-the-board tariffs. 

Jolley’s business is one of many featured in the report, all of which tell similar stories. In an example from Little Rock, Arkansas, Scott Pace, co-owner of local Kavanaugh Pharmacy, said he's begun stockpiling the 200 most commonly dispensed generics—diabetes medications, blood pressure drugs and antibiotics—building what he hopes is 90 days of inventory.

As noted by KFF, small independent pharmacies often operate on very slim profit margins, constrained by fixed reimbursement rates from insurers and pharmacy benefit managers (PBMs). With little flexibility to adjust prices for patients, any spike in upfront costs cuts directly into the pharmacy’s bottom line.

One small 15-employee outfit in Woodstock, New York, told reporters that control from PBMs makes it nearly impossible to pass rising costs on to consumers, leaving pharmacies to absorb the brunt of price increases.

"It's not like they're gonna go back and say, ‘Well, here's your 10% bump because of the 10% tariff,’" Neal Smoller, the owner of Village Apothecary, told KFF. "Costs are gonna go up, and then the sluggish responses from the PBMs—they're going to lead us to lose more money at a faster rate than we already are."

For now, all he can do is join others in stocking up on drugs and trimming expenses from his budget wherever possible. Collectively, the small pharmacies all fear the unknown could lead them to close their doors—or be bought up by national chains—to the detriment of patients who value market alternatives.

KFF Health News has more of these interviews and stories in their full report, which can be found at the link below.