Trump 200% pharma tariffs threaten to push up drug prices, hit margins
Shelf of pharmaceutical products.
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US President Donald Trump’s 200% tariff offer threatens to increase drug prices and dismantle corporate profit margins, as the pharmaceutical industry is engaged in planning scenario planning.
Once again on Tuesday, the President warned that the long -awaited industry -wide tariffs will be announced after 232 investigations about the sector in April.
Trump claimed that these taxes would not enter into force immediately, but would take a referee period called “about one year, one year and a half years”.
Analysts, however, warn that such a ratio – even with delay – will have a harmful effect on drug prices and profit margins.
“A 200% tariff will inflate the production costs, squeeze profit margins, and risk supply chain cuts will lead to drug shortages and higher prices for US consumers.”
UBS analysts stated that a “significant negative effect” on margins where goods are produced outside the United States, which could be a “disaster for patients, Afsaneh Beschloss, the founder and CEO of Rockcreek Group, said in a statement on Tuesday with a reference to 100% tax on Tuesday.
Beschloss said CNBC’s “closing Bell”. “This would be a potentially disaster because we need these drugs, and it takes a long time to produce these companies in the USA.” He said.
It is estimated that only 25% tariff in pharmaceutical imports will increase US drug prices about $ 51 billion per year and increase domestic prices up to 12.9% if it passes. accordingly Industrial Trade Group Pharmaceutical Research and American producers (PHRMA), who launched the president’s proposals as “against” against health results on Wednesday.
Delay brings very little relief
Pharmaceutical products were typically extracted from trade tariffs due to their critical nature. However, Trump has repeatedly targeted the sector because they thought about unfair pricing practices and called on companies to revive the production to the United States.
In response, including global pharmaceutical companies Novartis– Sanofi And Roche and US -based Hand Lilly And Johnson & Johnson – Made a large amounts of deposits to the USA
UBS called the 12 to 18 -month tariff shelves period of the management to carry the manufacturing states of the companies.
“We usually think of the production of commercial scale 4 to 5 years as a timeline to move the production of commercial scale to a new site.”
Industry is waiting for more details at the end of this month when the last chapter 232 investigation report was made. However, in the meantime, companies have no choice but to plan various potential results.
A Roche spokesman said he interacted with the stakeholders to “follow the situation closely” and “defend policies that handle the obstacles to access to the patient” and “defend policies that create a more egalitarian and affordable health ecosystem”.
The Swiss drug giant previously said that Trump’s drug pricing order could endanger US investment. However, on Wednesday, the proposed financing would allow the US to continue to create production footprints.
Bayer said that he focused on “various tariff announcements” and focuses on securing supply chains and “minimizing any potential impact”.
Meanwhile, Novartis said that he continued to work with the US Management and Trade Association partners and that there was no “any change in the planned US investment.
Astrazeneca and Sanofi did not respond immediately to CNBC’s request for comments, and Novo Nordisk refused to comment on the quiet period before earnings.
Hopes left for carving
Pharmaceutical industry Tariffs carved throughout the sector. However, as these hopes become pale, attention is now a potential buffer.
US-UK trade agreement was announced last month, still, states Both parties will negotiate “Pre -preferential treatment for the pharmacists of the United Kingdom and Pharmaceutical Components of the Pharmaceutical Components of the Investigation of Chapter 232.
Pharmaceutical companies in Switzerland and the European Union may be aiming at similar carving outputs in potential agreements. However, question marks for companies and consumers continue soon without clarity.
“This uncertainty will be affected by which sectors will be affected and which will not be affected and which will not have a constant negative effect,” CNBC said on Wednesday. He said.
