{"id":1209,"date":"2025-04-28T03:10:21","date_gmt":"2025-04-28T03:10:21","guid":{"rendered":"https:\/\/www.insuracarelife.com\/blog\/europes-pharma-industry-braces-for-pain-as-trump-tariff-threat-looms\/"},"modified":"2025-04-28T03:10:21","modified_gmt":"2025-04-28T03:10:21","slug":"europes-pharma-industry-braces-for-pain-as-trump-tariff-threat-looms","status":"publish","type":"post","link":"https:\/\/www.insuracarelife.com\/blog\/europes-pharma-industry-braces-for-pain-as-trump-tariff-threat-looms\/","title":{"rendered":"Europe\u2019s Pharma Industry Braces for Pain as Trump Tariff Threat Looms"},"content":{"rendered":"<div data-testid=\"companionColumn-0\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Insulin, heart treatments and antibiotics have flowed freely across many borders for decades, <a class=\"css-yywogo\" href=\"https:\/\/www.wto.org\/english\/tratop_e\/pharma_ag_e\/pharma_agreement_e.htm\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">exempt from tariffs<\/a> in a bid to make medicine affordable. But that could soon change.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">For months, President Trump has been promising to impose higher tariffs on pharmaceuticals as part of his plan to reorder the global trading system and bring key manufacturing industries back to the United States. This month, he said pharmaceutical tariffs <a class=\"css-yywogo\" href=\"https:\/\/www.bloomberg.com\/news\/videos\/2025-04-14\/trump-says-pharmaceutical-tariffs-coming-in-near-future\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">could come<\/a> in the \u201cnot too distant future.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">If they do, the move would have serious \u2014 and wildly uncertain \u2014 consequences for drugs made in the European Union.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Pharmaceutical products and chemicals are the bloc\u2019s <a class=\"css-yywogo\" href=\"https:\/\/ec.europa.eu\/eurostat\/statistics-explained\/index.php?title=USA-EU_-_international_trade_in_goods_statistics\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">No. 1 export<\/a> to America. Among them are the weight-loss blockbuster Ozempic, cancer treatments, cardiovascular drugs and flu vaccines. Most are name-brand drugs that yield a large profit in the American market, with its high prices and vast numbers of consumers.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-1\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">\u201cThese are critical things that keep people alive,\u201d said L\u00e9a Auffret, who heads international affairs for BEUC, the European Consumer Organization. \u201cPutting them in the middle of a trade war is highly concerning.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">European companies could react to Mr. Trump\u2019s tariffs in a range of ways. Some pharmaceutical companies trying to dodge the tariffs have already announced plans to increase production in the United States, which Mr. Trump wants. Others could decide to move production there later.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Other companies appear to be staying put, but could raise their prices to cover the tariffs, pushing up costs for patients. And higher prices could affect not only American consumers, but also patients in Europe. Some companies have begun to <a class=\"css-yywogo\" href=\"https:\/\/www.ft.com\/content\/de921b3c-988c-4d60-aca1-def85c70d299\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">argue<\/a> that Europe should create more favorable conditions for their businesses by dismantling some of the rules that keep drug prices down.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Or some middle ground could play out: Companies might shift their financial profits to the United States for accounting purposes to avoid import charges, even as they leave their physical factories overseas to avoid the expenses of moving and challenges of having to set up new supply chains.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Ms. Auffret\u2019s group has already warned European officials that they must not hit back at an attack on the important industry by tariffing American drugs in return: Tit for tat would come at too serious of a cost to European consumers.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-2\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">But the pharmaceutical sector is complicated. Agreements with insurance companies and government agencies can make it difficult to rapidly adjust prices for branded drugs, while government regulations can make moving both a challenge and a long-term commitment. The upshot is that no one can confidently predict the outcome.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cWe haven\u2019t tariffed pharmaceuticals in a very long time,\u201d said Brad W. Setser, an economist at the Council on Foreign Relations who has closely studied the tax rules that incentivize overseas production.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-3\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Even as Mr. Trump has paused his so-called \u201creciprocal\u201d tariffs in favor of an across-the-board rate of 10 percent during the hiatus, he has left in place some industry-specific tariffs and made clear that computer chips and pharmaceutical products would be next. The United States recently kicked off investigations into both sectors, a first step toward hitting them with tariffs.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Many industry experts expect that the new tariffs could be 25 percent, in line with those on steel, aluminum and cars.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-4\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">For the countries at the center of Europe\u2019s drug industry, the possible tariffs are particularly worrisome. That is especially true for Ireland, where pharmaceuticals make up 80 percent of all exports to the United States.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Many drug companies originally moved to Ireland because it offers very low corporate tax rates. But it has also worked to develop its pharmaceutical industry and offers access to a highly skilled work force.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">In recent years, the sector has grown rapidly. More than <a class=\"css-yywogo\" href=\"https:\/\/www.idaireland.com\/getmedia\/41fd7393-cf60-40c9-9fda-ba6b79401a8e\/Updated-Pharma-Brochure.pdf\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">90 pharmaceutical companies<\/a> are now based there, according to <a class=\"css-yywogo\" href=\"https:\/\/www.idaireland.fr\/explore-your-sector\/business-sectors\/biopharma\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">Ireland\u2019s Foreign Direct Investment Agency<\/a>, and many of the biggest American drugmakers have operations in the nation. Last year, Ireland\u2019s pharma industry exported <a class=\"css-yywogo\" href=\"https:\/\/www.cso.ie\/en\/releasesandpublications\/ep\/p-gei\/goodsexportsandimportsdecember2024\/\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">58 billion euros<\/a>, or about $66 billion, in pharmaceutical and chemical products to the United States.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cThe Irish are smart, yes, smart people,\u201d Mr. Trump said in March, while Prime Minister Miche\u00e1l Martin of Ireland was visiting the White House. \u201cYou took our pharmaceutical companies and other companies,\u201d he said. \u201cThis beautiful island of five million people has got the entire U.S. pharmaceutical industry in its grasps.\u201d<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-5\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Now, tariffs could chip away at the benefits of manufacturing there \u2014 which is Mr. Trump\u2019s goal.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cIn the U.S., we don\u2019t make our own drugs anymore,\u201d Mr. Trump said last week from the Oval Office, adding that \u201cthe drug companies are in Ireland.\u201d<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-6\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Firms are already bracing. Companies have been rushing to export their pharmaceuticals from Ireland and into the U.S. market before the gauntlet falls, <a class=\"css-yywogo\" href=\"https:\/\/www.cso.ie\/en\/releasesandpublications\/ep\/p-gei\/goodsexportsandimportsfebruary2025\/\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">statistics suggest<\/a>.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Nor is Ireland the only country affected. Germany, Belgium, Denmark and Slovenia are also <a class=\"css-yywogo\" href=\"https:\/\/ec.europa.eu\/eurostat\/statistics-explained\/index.php?title=International_trade_in_medicinal_and_pharmaceutical_products&amp;oldid=636772\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">major exporters<\/a>.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cIt\u2019s an enormous issue for Europe,\u201d said Penny Naas, who leads a competitiveness program for the think tank the German Marshall Fund and has long worked in European public policy and corporate affairs.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">European leaders have been reaching out to both American officials and the industry. In addition to the Irish prime minister\u2019s recent visit to the Oval Office, the Irish foreign affairs minister traveled to Washington to meet with the commerce secretary.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-7\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Ursula Von der Leyen, the president of the European Commission, the European Union\u2019s executive arm, has met in Brussels with the European Federation of Pharmaceutical Industries and Associations, the lobby group representing Europe\u2019s biggest drugmakers.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">The industry is leveraging the moment to push for wish-list items, like less red tape.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">The European drug lobby group told Ms. von der Leyen that companies could shift production or investment toward the United States to limit their exposure to Mr. Trump\u2019s tariffs, especially when faster approvals and easier access to capital are making America more attractive.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">At least 18 members of the group, which includes Bayer, Pfizer and Merck, have planned nearly \u20ac165 billion in investments in the European Union over the next five years. As much as half of that could shift to the United States, the federation said. Nor is it alone in that prediction.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cPharma needs more attractive conditions to produce in Europe,\u201d said Dorothee Brakmann, the director of Pharma Deutschland, Germany\u2019s largest association of pharmaceutical companies.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Such warnings seem to have teeth. Some companies have begun to lay out plans to spend more in the United States; the firm Roche last week announced a <a class=\"css-yywogo\" href=\"https:\/\/www.reuters.com\/business\/healthcare-pharmaceuticals\/roche-invest-50-billion-united-states-over-next-five-years-2025-04-22\/\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">$50 billion American investment plan<\/a>, the latest in <a class=\"css-yywogo\" href=\"https:\/\/www.ft.com\/content\/a46eff5f-7cf5-4a34-8e82-bc13ce3223cc\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">a string<\/a> of such announcements.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-8\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">In commentary published last week, the chief executives of Novartis and Sanofi suggested that less regulation was not enough to stem the bleeding. They argued that \u201cEuropean price controls and austerity measures reduce the attractiveness of its markets,\u201d and that the bloc should pave the way for higher prices.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-9\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Industry executives have also warned that tariffs on the sector could disrupt supply lines, impair patient access and dampen research and development.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cThere\u2019s a reason\u201d that tariffs on medicines are set to zero, Joaquin Duato, the chief executive of the drugmaker Johnson &amp; Johnson, said on a <a class=\"css-yywogo\" href=\"https:\/\/www.cnbc.com\/2025\/04\/16\/healthy-returns-drugmakers-comment-on-trumps-pharmaceutical-tariffs.html#:~:text=%22There&#039;s%20a%20reason...,an%20earnings%20call%20on%20Tuesday.\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">recent earnings call<\/a>. \u201cIt\u2019s because tariffs can create disruptions in the supply chain, leading to shortages.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Ms. von der Leyen has emphasized similar concerns, <a class=\"css-yywogo\" href=\"https:\/\/ec.europa.eu\/commission\/presscorner\/detail\/en\/read_25_1018\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">warning<\/a> that tariffs on the pharmaceutical sector risk \u201cimplications for globally interconnected supply chains and availability of medicines for European and U.S. patients alike.\u201d<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-10\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Pharmaceutical tariffs also hold another danger for the European Union.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">The bloc has been trying to build up its ability to manufacture generic drugs, which are medically essential but much less profitable than the name-brand products, and are frequently made in Asia.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">But if U.S. tariffs mean that generic drug manufacturers in China and India are suddenly looking for customers outside of America, it could send a flood of cheaper-than-usual pills toward Europe.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">That could make it even more difficult for the European Union to establish a domestic manufacturing base for generics, even as tariffs lure name-brand drug production toward the United States.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cWe do think that it\u2019s likely that this is going to cause increased investment in the U.S.,\u201d said Diederik Stadig, a sectoral economist at ING. \u201cThe European Commission needs to be on the ball.\u201d<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Insulin, heart treatments and antibiotics have flowed freely across many borders for decades, exempt from tariffs in a bid to make medicine affordable. But that could soon change. For months, President Trump has been promising to impose higher tariffs on pharmaceuticals as part of his plan to reorder the global trading system and bring key [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1210,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[366,894,533,160,896,895,395,814,158],"class_list":["post-1209","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-braces","tag-europes","tag-industry","tag-looms","tag-pain","tag-pharma","tag-tariff","tag-threat","tag-trump"],"_links":{"self":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts\/1209","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/comments?post=1209"}],"version-history":[{"count":0,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts\/1209\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/media\/1210"}],"wp:attachment":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/media?parent=1209"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/categories?post=1209"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/tags?post=1209"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}