ɫ���

Despite analyst warnings of heightened financial risk, pharma CEOs across the US and Europe remain confident that the latest US-EU trade deal and associated tariffs will have limited impact.

As per a new deal between the two global economic powerhouses, the EU will pay the US a tariff rate of 15% for pharmaceuticals. Medicines are the largest European exports to the US by value, and the EU accounts for approximately 60% of all pharmaceutical imports to the US.

Top-selling drugs such as AbbVie’s Humira (adalimumab), MSD’s Keytruda (pembrolizumab), and Novo Nordisk’s Ozempic (semaglutide), for example, are manufactured in Europe and sent to the US, representing billion-dollar markets.

Analysts from GlobalData’s Pharma Strategic Intelligence team say that: “Companies manufacturing pharmaceutical products in Europe will need to anticipate financial exposure when planning launches in the US due to the unfavourable gross to net dynamics, weakened pricing leverage with US payers, and slower commercial uptake as insurers reassess cost effectiveness due to the tariffs.”

US President Donald Trump has had a sharp focus on the pharma industry since assuming office. Analysts predict that adding duties to incoming goods will likely elevate costs across the pharmaceutical value chain, ultimately raising drug prices for patients. The policies make for interesting analysis when combined with his desire to cut prescription prices in the country.

Diederik Stadig, sector economist for TMT & healthcare at ING, wrote in a July note: “A tariff would hurt consumers most of all, as they would feel the inflationary effect of tariffs directly when paying for prescriptions.”

GlobalData Strategic Intelligence

US Tariffs are shifting - will you react or anticipate?

Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.

By GlobalData

The European Federation of ɫ��� Industries and Associations (EFPIA), for example, has maintained that tariffs on medicines are ineffective. The group says such policies only hinder patient access to medicines.

GlobalData also forecasts disruptions to launch planning, particularly late-stage assets with EU-based manufacturing and production planned for entry into the US. R&D budgets of pharmaceutical companies are already under pressure and the firefighting of tariffs could place additional strain on resources.

CEOs signal resilience

CEOs of big pharma companies, however, are maintaining a brave face despite the projected headwinds. The UK-EU trade deal announcement arrived in the middle of the pharma industry’s Q2 reporting period, where execs were pressed on financial outlooks.

In a Q2 earnings call, AbbVie’s CEO Rob Michael said the US company is “fairly insulated” from any tariff-related impacts in 2025, though caveated that the company would not speculate on the longer-term consequences.

AstraZeneca shared the same sentiment. CEO Pascal Soriot said the British-Swedish drugmaker is “almost self-sufficient in terms of supply,” adding that “tariffs is not an issue that is really affecting us very much.”

However, AstraZeneca is on a long list of pharma companies transferring manufacturing to the US. This includes a $4bn investment to build a new manufacturing plant in Virginia. Sanofi has outlaid $20bn to bolster US manufacturing through 2030 and Roche unveiled a similar $50bn investment strategy, to name just a couple.

The team at GlobalData added: “Ultimately, the recent US-EU trade deal has increased the level of uncertainty within the pharmaceutical industry, raising concerns on the potential of tariffs increasing past 15% in the future.

“While the full impact will take time to unfold, it will be interesting to see the adoption of different strategies on how the pharmaceutical industry looks to balance innovation, and ensuring patient access, while managing the pressures of tariffs as they unfold into a certain reality.”

A critical part of the industry’s future also relies on the outcome of the US government’s Section 232 investigation into the drug sector. The probe, which Trump initiated to evaluate the role of medicine imports on national security, could result in further tariffs being imposed.

MSD CEO Rob Davis said in the company’s Q2 earnings call: “We need to see more clarity both from the administration and just overall as to how exactly [the 15% tariff] is going to play out. It’s still not clear exactly how this relates relative to the February investigation and the timing of whether these apply now or will be phased in until there’s further guidance.”

AbbVie’s Michael said: “We’re having constructive discussions with the administration on sectoral tariffs. Clearly, the best way to motivate that is through tax incentives as well as a trade agenda that prioritises innovation. We’re well positioned as a company, but we’re not going to be able to really give you any details until we understand the outcome of the 232 investigation.”

Navigate the shifting tariff landscape with real-time data and market-leading analysis.

Request a free demo for GlobalData’s Strategic Intelligence .

Sign up for our daily news round-up!

Give your business an edge with our leading industry insights.

Sign up