Trump says that pharmaceutical tariffs are coming, but the shares rise
The Lilly Biotechnology Center in San Diego, California, on March 1, 2023.
Mike Blake | Reuters
The shares of some drugmakers rose on Wednesday, after President Donald Trump explained that he would pause steep tariffs for dozens of countries, which temporarily makes fears about the effects of potential tariffs on pharmaceuticals that were imported into the USA
Trump on Wednedsay announced that he would reduce the tariffs in most countries to 10% for 90 days, but would immediately increase the tariffs to China to 125%. However, the break does not seem to apply to sector -specific tariffs.
Pharmaceutical stocks fell on Trump’s comments a day earlier on Wednesday, which doubled for plans to prevent pharmaceutical-specific tariffs.
Shares of most US companies were positive on Wednesday Eli LillyPresent AbbviePresent Bristol Myers SquibbPresent RegeneronePresent MerchantPresent PfizerPresent Johnson & Johnson And Amgen In the past, all fell by at least 2% to 4% a day. Some shares of foreign companies, such as AstrazenecaPresent Novo Nordisk And Novartiswere also positive during the British drug maker GSK It was still 5%.
Trump said on Tuesday on Tuesday that, according to several reports, his government would announce a “big” tariff for pharmaceuticals “shortly”. He frees pharmaceuticals from his final tariffs, which were presented in a temporary relief for drug makers last week.
The President said the tariffs will encourage pharmaceutical companies to move the production operations to the USA – an effort that Eli Lilly, Johnson & Johnson and others are already pursuing. It happens that the domestic production of the pharmaceutical industry has shrunk dramatically in recent decades, with the most important parts of the production process move to China, India and other countries in which workers and other costs are cheaper.
The US imports of pharmaceuticals reached almost $ 213 billion in 2024, more than two and a half times a decade before, according to the United Nations Comtrade database on international trade.
FileToto: The Pfizer logo can be seen on April 28, 2014 in her headquarters in New York.
Andrew Kelly | Reuters
However, Wall Street analysts and companies have expressed concerns that it will be difficult to re -shape production in the country, which will be expensive, take several years and disturb the pharmaceutical supply chain and increase the drug costs for patients. Pharmaceutical manufacturers rely on a complex network of manufacturing facilities, sometimes in different countries, to get different steps of the production process.
“The global supply chains are complex, and Pharma among most – it is not as easy to move where someone reads on an iPhone,” said Evan Seigerman, analyst by BMO Capital Markets, in a note on Wednesday.
He said that the tariffs will “probably do little to push back to the United States, since companies already have robust operations in the country.
Seigerman said that he assumes that most large pharmaceutical companies will probably set the goal of “waiting until the end of Trump’s presidency in order to take more permanent production decisions into account”.
According to reports, a group of house democrats also requests the administration to protect the medical supply chains from what they described as “devastating consequences” that the trade war could cause to the US patients.
“The pension disorders of critical medical products will inevitably violate US patients, force providers to make impossible rationing decisions, and may even lead to death, since the treatments are delayed, or more effective drugs and products are exchanged for less effective alternatives,” wrote the legislators in the letter, reported The Hill.
Some companies that have invested billions to increase US production and build up a good will with Trump have pushed the tariff back and warn of their potential effects on research and development in the industry and patients.
“We cannot violate these agreements, so we have to eat the costs for the tariffs and compromise in our own companies,” said CEO of Eli Lilly, Dave Ricks, in an interview, just over a month after the company interior to produce innovation.
“As a rule, this will be in the reduction of employees or research and development, and I assume that F&E will come first. This is a disappointing result,” said Ricks.
In March, J&J announced a new investment of 55 billion US dollars in manufacturing, research and development and technology in the United States in the next four years. The company did not comment on the tariffs.
