Drugmakers, pharmaceutical makers are reportedly lobbying U.S. President Donald Trump to reduce tariffs on imported pharmaceutical products in an effort to ease the sting from the charges and to give them time to shift manufacturing, Reuters revealed.
Trump plans to reveal a large tariff initiative. He stated that the upcoming reciprocal tariffs will apply to all countries, rather than just a select group of 10 to 15 with the highest trade deficits. He has indicated that he will soon impose tariffs on the pharmaceutical industry, which has previously been spared from past trade conflicts, following his actions against other sectors.
Four sources, who requested anonymity due to the confidential nature of discussions between the administration and the industry, shared their understanding that Trump will not provide details about any pharmaceutical tariffs on Wednesday.
However, the major multinational pharmaceutical companies anticipate that U.S. tariffs on medical products are unavoidable. They aim for a gradual increase to the threatened 25% tariff rather than having it applied from the start. “The notion of a gradual tariff increase, a kind of tiered approach, is certainly being discussed within the pharmaceutical industry,” one source mentioned.
A study examining the potential application of industry-specific tariffs was mentioned by three of the four sources, along with an additional source knowledgeable about the issue.
Large drugmakers possess global manufacturing capabilities, primarily in the U.S., Europe, and Asia, and relocating more production to the U.S. represents a significant investment of resources. The industry trade group PhRMA has stated that establishing a new production facility in the U.S. can take 5 to 10 years and cost $2 billion, partly due to regulatory requirements.
During meetings in February and March, PhRMA urged the U.S. administration to consider implementing a staggered tariff rate increase over several years, allowing companies adequate time to adjust, according to one of the four sources.
Though the situation is still evolving, the industry remains optimistic that any preliminary tariff announcements concerning the sector will be lower than the 25% threatened by Trump, according to the same source.
It seems there is increasing recognition within the Trump administration that relocating drug manufacturing to the U.S. from overseas is not a swift process. This has sparked optimism among certain industry members that the president could contemplate a gradual increase of tariffs to 25%, another source indicated.
Pharmaceutical companies contend that tariffs may heighten the risk of drug shortages and limit patient access. Nonetheless, Trump advocates for these fees, asserting that the U.S. must enhance domestic drug production to reduce dependence on foreign medicine supplies.
A representative from the industry lobby expressed optimism that adherence to U.S. regulations on policymaking, which mandate public comment periods for federal laws, might delay the introduction of the new fees in the pharmaceutical sector.
In recent months, several multinational pharmaceutical companies, including Johnson & Johnson , Eli Lilly, AstraZeneca, and GSK, have announced billions in new investments to boost production of their top-selling drugs for the U.S. market.
This month, several major European pharmaceutical companies announced that certain medicines could be impacted by U.S. tariffs on the EU, as a significant portion of their manufacturing occurs outside the United States.
An executive from a European drugmaker stated that increasing U.S. production of their medicines, currently made in limited quantities, will not be a lengthy process. According to them, establishing new manufacturing lines at current U.S. facilities for medicines now produced overseas for the U.S. market will require a minimum of two years.
