Drug Prices, Trade Tensions, and the Uneven U.S. Consumer Recovery

Northern Trust’s Weekly Economic Commentary (Oct 17, 2025) dissects three key global and domestic themes shaping economic and policy dynamics.

• Pharmaceutical costs in the U.S. remain up to five times higher than in peer nations, with fragmented price negotiations, limited generics, and extended patent protections driving the gap—posing long-term fiscal strain as drug spending nears $800B by 2033.

• U.S.–China trade frictions are resurfacing: new rare-earth export controls and tariff threats on both sides risk renewed supply chain disruptions and higher shipping costs across Asia and Europe.

• The U.S. consumer base is splitting, as high-income households sustain growth while lower earners face rising delinquencies and flat spending—a divergence that could weigh on future demand.

Can policymakers balance healthcare reform, geopolitical risk, and inequality without stalling growth? The full commentary offers in-depth analysis.