Pharma industry lobbies Trump government for gradual tariffs

With US President Donald Trump’s call for tariffs on drug manufacturing outside of the US, the pharmaceutical industry has started lobbying for phased tariffs on imported pharmaceutical products, hoping to lessen the burden of increased charges and allow for enough time to shift manufacturing to the US, according to an exclusive report from Reuters.

On Wednesday April 2, Trump announced far-reaching penalties to markets across the globe. However, ahead of their announcement, the pharmaceutical industry had already started lobbying for phased tariffs on imported pharmaceutical products in the hopes of reducing the impact of the charges and reallocating manufacturing and distribution. With the tariffs plunging global financial markets, drawing condemnation from leaders around the world, and triggering retaliatory policies against the US, the pharma industry was noticeably absent from any specific measures in Wednesday’s announcement. However, the industry is still on edge – some of the largest drug companies consider tariffs an inevitability, and are bracing for impact. Some hope for an incremental phasing towards the proposed 25% tariff. Sources familiar with these discussions disclosed to Reuters that “The idea of incremental ramp up of tariffs, a sort of gradation if you will, is definitely out there from the pharma industry side.”

Major multinational drugmakers are already starting to shift manufacturing of their drug products to the US – Merck announced the opening of a new vaccine production facility in North Carolina last month, and Pfizer CEO Albert Bourla outlined a potential for Pfizer to shift overseas drug manufacturing to the US in an interview at the 45^th TD Cowen annual healthcare conference. Yet, the reality of moving production to the US still constitutes a huge commitment of resources, with industry trade group PhRMA stating it could take up to 10 years and US$2 billion to bring a brand-new production facility to the US. Tariffs pose a threat to the global drug supply chain, with increased drug shortages and limited access to lifesaving medicines for patients, argues the pharmaceutical industry.

Meetings between PhRMA and the Trump administration over February and March urged the consideration of phased tariff rate increases over several years. While any confirmed changes are yet to be announced, growing acknowledgement within the Trump administration of the enormous effort to shift drug manufacturing to the US has the industry hopeful that an initial tariff announcement will be below the 25% rate initially proposed.

Source:

Exclusive: Pharma industry lobbies Trump for phased tariffs, sources say [Accessed April 1, 2025] https://www.reuters.com./business/healthcare-pharmaceuticals/pharma-industry-lobbies-trump-phased-tariffs-sources-say-2025-04-01/