Trump Pharma Plan Looks Like Reprieve for Many Drugmakers

(Bloomberg) — President Donald Trump’s plan to impose a 100% tariff on branded drug imports was greeted with a shrug by many investors, who are betting his exemptions for companies with US manufacturing will soften any blow.

While Trump’s move threatens to double the cost of some imported treatments if construction on US manufacturing sites hasn’t begun by Oct. 1, many big drugmakers already have US plants or are building them.

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“All big pharma companies have a US presence and almost all have announced large investments in the years to come,” Vontobel analyst Sibylle Bischofberger Frick said in a note. “Will that prevent their drugs from tariffs? In our view, yes.”

Merck & Co., Novo Nordisk A/S and Eli Lilly & Co. are among firms that have started US construction since 2023, with building sites in Delaware, North Carolina and Texas. The projects are aimed at anchoring supply chains inside US borders and supporting blockbuster medicines in cancer, diabetes and immunology.

Others, including Novartis AG and Sanofi SA, have announced large US investments, though it isn’t clear how far those projects have progressed. On Friday, Amgen Inc. announced a new US investment, saying it plans to spend $650 million to expand a manufacturing plant in Puerto Rico.

Novartis doesn’t expect any impact from the 100% tariffs as it’s “well prepared with product supply in the US through mid-2026,” the Swiss pharma group said, adding it’s pushing forward with a $23 billion investment in US-based infrastructure. Sanofi didn’t immediately comment.

Major US drugmakers Lilly and Pfizer Inc. were up more than 1% in early trading in New York on Friday. The Europe Stoxx 600 pharmaceuticals index was up less 0.5%, with a few stocks, such as GSK Plc and Novartis, edging higher. Ozempic-maker Novo Nordisk was down 1.6% at 2:53 p.m. in Copenhagen.

“The actual comment from the president is direct but its impact may be somewhere between nebulous and negligible,” Mizuho Securities health-care specialist Jared Holz said in a note. “All major players have some production presence domestically and almost all have announced increased investment directly tied towards local manufacturing.”

Bloomberg Intelligence economists Nicole Gorton-Caratelli and Maeva Cousin estimate the new duties could hit about $220 billion of US pharmaceutical imports and lift the average tariff rate by 3.3 percentage points.

Still, Trump’s plan — announced in a social media post — released few specifics on which producers would be affected. Substantial uncertainty remains, including whether countries or regions that have struck trade deals with the US will avoid the new levy.

For example, a European Union spokesman on Friday said the bloc had agreed terms in its framework trade deal with the US that tariffs on its pharmaceutical, semiconductor and lumber exports won’t exceed 15%.

Overall, Trump’s announcement looks like a “win” for the pharmaceutical industry, Jefferies analysts said in a note.

Still, some drugmakers could be left vulnerable. John Crowley, the President and chief executive officer of the US-based Biotechnology Innovation Organization, decried the tariffs as disproportionately impacting small companies that rely on contractors to do their manufacturing.

“The immediacy of punitive, 100% tariffs on innovative medicines for any company without ‘shovels in the ground’ would devastate our nation’s small and mid-sized biotechnology companies,” Crowley said in a written statement.

Multinational drugmakers have said they primarily rely on plants in the US to supply the domestic market, but not all of them have broken ground on promised investments. PhRMA, the US drug industry’s largest lobbying group, said in a statement that imposing levies on drugs could threaten companies’ plans to expand, “because every dollar spent on tariffs is a dollar that cannot be invested in American manufacturing or the development of future treatments and cures.”

What Bloomberg Economics Says…

“The countries most exposed to the move are Singapore and Switzerland. The UK also has some important pharmaceuticals exports to the US – its trade agreement with the US mentioned that special rates would be considered in the event of new Section 232 tariff, but no formal rate was agreed. A similar approach seems also to be in place for Japan.”

— Nicole Gorton-Caratelli and Maeva Cousin.

Several of America’s best-selling drugs are still largely produced abroad. The main ingredient in Novo Nordisk’s diabetes and weight-loss juggernauts Ozempic and Wegovy is made in Denmark, while a critical first step in the production of Mounjaro, Eli Lilly’s rival GLP-1 medicine, happens in Ireland.

Novo Nordisk said Friday that “cranes are rising” over its manufacturing plant in North Carolina, where it’s halfway through a $4.1 billion expansion.

Johnson & Johnson’s immune-disease therapy Stelara and cancer drug Darzalex are manufactured in Switzerland and Denmark, respectively. Opdivo, Bristol-Myers Squibb Co.’s blockbuster cancer immunotherapy, relies heavily on production in Ireland and Switzerland. Novartis’s Cosentyx and Entresto also originate in Swiss facilities.

Among UK drugmakers, an AstraZeneca Plc spokesman said that the company is “insulated” from US tariffs, citing a high proportion of domestic drug manufacturing. He added that construction for a planned drug substance facility in Virginia — part of the company’s $50 billion US investment pledge by 2030 — would begin soon.

A GSK spokesperson said the pharma group continues to “engage constructively with the US administration.”

Germany’s Merck KGaA, one of the few major European pharma firms that hasn’t announced a major pledge to build US drug factories, said it’s “engaging with the US administration to understand details of this tariff and impact on our business and the patients we serve.”

The company isn’t affiliated with Merck & Co. of the US.

Some Japanese companies also make drugs for rare and serious conditions that might be subject to the new tariff. Hemlibra, used to help clot blood in hemophilia patients, is made by Chugai Pharmaceutical Co, while Enhertu, used to deliver chemotherapy directly to breast cancer cells without damaging healthy ones, is made by Daiichi Sankyo Co.

Still, the operational impact is likely limited for drugmakers in Asia, said Tony Ren, head of Asia health-care research at Macquarie Securities Ltd.

“For Japan, it’s more likely to be an impact on sentiment, but less of an impact on fundamentals,” he said, adding that few Chinese, Indian or Korean firms sell branded drugs in the US.

–With assistance from Madison Muller, Jennifer A. Dlouhy, Blaise Robinson, Brendan Murray, Sonja Wind, Naomi Kresge, Alberto Nardelli, Lisa Pham, Jason Gale, Amber Tong, Kanoko Matsuyama, Lauren Dezenski, Damian Garde and Rachel Cohrs Zhang.

(Updates with additional US investment, trade group statements starting in fifth paragraph.)

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©2025 Bloomberg L.P.

(Bloomberg) — President Donald Trump’s plan to impose a 100% tariff on branded drug imports was greeted with a shrug by many investors, who are betting his exemptions for companies with US manufacturing will soften any blow.

While Trump’s move threatens to double the cost of some imported treatments if construction on US manufacturing sites hasn’t begun by Oct. 1, many big drugmakers already have US plants or are building them.

Most Read from Bloomberg

“All big pharma companies have a US presence and almost all have announced large investments in the years to come,” Vontobel analyst Sibylle Bischofberger Frick said in a note. “Will that prevent their drugs from tariffs? In our view, yes.”

Merck & Co., Novo Nordisk A/S and Eli Lilly & Co. are among firms that have started US construction since 2023, with building sites in Delaware, North Carolina and Texas. The projects are aimed at anchoring supply chains inside US borders and supporting blockbuster medicines in cancer, diabetes and immunology.

Others, including Novartis AG and Sanofi SA, have announced large US investments, though it isn’t clear how far those projects have progressed. On Friday, Amgen Inc. announced a new US investment, saying it plans to spend $650 million to expand a manufacturing plant in Puerto Rico.

Novartis doesn’t expect any impact from the 100% tariffs as it’s “well prepared with product supply in the US through mid-2026,” the Swiss pharma group said, adding it’s pushing forward with a $23 billion investment in US-based infrastructure. Sanofi didn’t immediately comment.

Major US drugmakers Lilly and Pfizer Inc. were up more than 1% in early trading in New York on Friday. The Europe Stoxx 600 pharmaceuticals index was up less 0.5%, with a few stocks, such as GSK Plc and Novartis, edging higher. Ozempic-maker Novo Nordisk was down 1.6% at 2:53 p.m. in Copenhagen.

“The actual comment from the president is direct but its impact may be somewhere between nebulous and negligible,” Mizuho Securities health-care specialist Jared Holz said in a note. “All major players have some production presence domestically and almost all have announced increased investment directly tied towards local manufacturing.”

Bloomberg Intelligence economists Nicole Gorton-Caratelli and Maeva Cousin estimate the new duties could hit about $220 billion of US pharmaceutical imports and lift the average tariff rate by 3.3 percentage points.

Still, Trump’s plan — announced in a social media post — released few specifics on which producers would be affected. Substantial uncertainty remains, including whether countries or regions that have struck trade deals with the US will avoid the new levy.

For example, a European Union spokesman on Friday said the bloc had agreed terms in its framework trade deal with the US that tariffs on its pharmaceutical, semiconductor and lumber exports won’t exceed 15%.

Overall, Trump’s announcement looks like a “win” for the pharmaceutical industry, Jefferies analysts said in a note.

Still, some drugmakers could be left vulnerable. John Crowley, the President and chief executive officer of the US-based Biotechnology Innovation Organization, decried the tariffs as disproportionately impacting small companies that rely on contractors to do their manufacturing.

“The immediacy of punitive, 100% tariffs on innovative medicines for any company without ‘shovels in the ground’ would devastate our nation’s small and mid-sized biotechnology companies,” Crowley said in a written statement.

Multinational drugmakers have said they primarily rely on plants in the US to supply the domestic market, but not all of them have broken ground on promised investments. PhRMA, the US drug industry’s largest lobbying group, said in a statement that imposing levies on drugs could threaten companies’ plans to expand, “because every dollar spent on tariffs is a dollar that cannot be invested in American manufacturing or the development of future treatments and cures.”

What Bloomberg Economics Says…

“The countries most exposed to the move are Singapore and Switzerland. The UK also has some important pharmaceuticals exports to the US – its trade agreement with the US mentioned that special rates would be considered in the event of new Section 232 tariff, but no formal rate was agreed. A similar approach seems also to be in place for Japan.”

— Nicole Gorton-Caratelli and Maeva Cousin.

Several of America’s best-selling drugs are still largely produced abroad. The main ingredient in Novo Nordisk’s diabetes and weight-loss juggernauts Ozempic and Wegovy is made in Denmark, while a critical first step in the production of Mounjaro, Eli Lilly’s rival GLP-1 medicine, happens in Ireland.

Novo Nordisk said Friday that “cranes are rising” over its manufacturing plant in North Carolina, where it’s halfway through a $4.1 billion expansion.

Johnson & Johnson’s immune-disease therapy Stelara and cancer drug Darzalex are manufactured in Switzerland and Denmark, respectively. Opdivo, Bristol-Myers Squibb Co.’s blockbuster cancer immunotherapy, relies heavily on production in Ireland and Switzerland. Novartis’s Cosentyx and Entresto also originate in Swiss facilities.

Among UK drugmakers, an AstraZeneca Plc spokesman said that the company is “insulated” from US tariffs, citing a high proportion of domestic drug manufacturing. He added that construction for a planned drug substance facility in Virginia — part of the company’s $50 billion US investment pledge by 2030 — would begin soon.

A GSK spokesperson said the pharma group continues to “engage constructively with the US administration.”

Germany’s Merck KGaA, one of the few major European pharma firms that hasn’t announced a major pledge to build US drug factories, said it’s “engaging with the US administration to understand details of this tariff and impact on our business and the patients we serve.”

The company isn’t affiliated with Merck & Co. of the US.

Some Japanese companies also make drugs for rare and serious conditions that might be subject to the new tariff. Hemlibra, used to help clot blood in hemophilia patients, is made by Chugai Pharmaceutical Co, while Enhertu, used to deliver chemotherapy directly to breast cancer cells without damaging healthy ones, is made by Daiichi Sankyo Co.

Still, the operational impact is likely limited for drugmakers in Asia, said Tony Ren, head of Asia health-care research at Macquarie Securities Ltd.

“For Japan, it’s more likely to be an impact on sentiment, but less of an impact on fundamentals,” he said, adding that few Chinese, Indian or Korean firms sell branded drugs in the US.

–With assistance from Madison Muller, Jennifer A. Dlouhy, Blaise Robinson, Brendan Murray, Sonja Wind, Naomi Kresge, Alberto Nardelli, Lisa Pham, Jason Gale, Amber Tong, Kanoko Matsuyama, Lauren Dezenski, Damian Garde and Rachel Cohrs Zhang.

(Updates with additional US investment, trade group statements starting in fifth paragraph.)

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©2025 Bloomberg L.P.