Australia’s healthcare and pharmaceuticals manufacturing sector is expected to face a disproportionate impact from global tariffs, according to risk management company Fair Supply.
Although the timing and extent of tariffs remains unclear, early modelling by Fair Supply has estimated that the indirect costs of new and reciprocal tariffs could cost the Australian economy AU$15 billion. Of that, Fair Supply estimates the cost to the local healthcare and pharma industry would be more than $1.6 billion.
Fair Supply provides an environmental, social, and government risk management and compliance platform. It has developed what it describes as a world-first supply chain tariff calculator that maps over 60 billion global supply chains and calculates cumulative tariff impacts across multiple tiers of international trade.
Fair Supply said the Australia tech startup is “set to transform how businesses understand and respond to the economic fallout of global tariffs”.’
… the imposition of global tariffs is expected to significantly impact the Australian healthcare and pharmaceutical sector, even though Australia itself is not directly targeted
Pharma Cost Increases
Fair Supply said the imposition of global tariffs is expected to significantly impact the Australian healthcare and pharmaceutical sector, even though Australia itself is not directly targeted.
“As tariffs… take effect on key supplier countries, the sector is projected to face a significant increase in pharmaceutical manufacturing costs,” the company said in a media release.
“These increases will likely stem from higher prices for imported raw materials, components, and equipment critical to production. For example, basic chemical precursors produced in the US are shipped to China for conversion into active pharmaceutical ingredients (APIs).
“The finished APIs are then exported to countries like Australia for final formulation.”
Fair Supply said these supply chain vulnerabilities caused by the tariff war initiated by the US could force pharmaceutical companies across Australia to consider restructuring their supply chains, incurring additional regulatory, logistical, and operational costs.
Tariff Calculator
Dr Arne Geschke, Co-Founder and Chief Technology Officer at Fair Supply, said the tariff calculator captures the true cost of the tariffs that impact businesses, not just at the border but throughout the highly connected global supply chain.
“Tariffs will be embedded in the DNA of global supply chains; without visibility into those connections, companies are flying blind. While the focus has often been on tariffs applied at point-of-entry, the real damage is further downstream,” Dr Geschke said.
“These indirect costs are frequently invisible to traditional monitoring and are often passed onto Australian businesses with little control over their full supplier ecosystem. Our tool gives businesses the visibility they need to make strategic, informed decisions,” Dr Geschke said.
He said the calculator provides Australian businesses with insight into real-time cost fluctuations.
By entering the product and country of purchase, users can see where hidden tariff costs add up and explore alternative sourcing options. This makes it easier for companies to compare markets and choose the most cost-effective supplier based on current tariff conditions, he said.
Unlike static models, the calculator is designed to incorporate the most recent tariff announcements, including reciprocal and retaliatory measures, as they are introduced.
“This real-time recalibration ensures businesses always work with up-to-date insights that reflect current global trade dynamics, enabling users to respond proactively to shifting cost pressures and avoid cost blowouts or procurement disruption,” Dr Geschke said.
A free version of Fair Supply’s Supply Chain Tariff Calculator is available online at: fairsupply-tariffs.vercel.app/ with a paid version offering additional features and analytics.
