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President Trump’s 100% tariff on imported branded pharmaceuticals is expected to hit American consumers and global drug stocks, but there are loopholes: Generic drugs are excluded, and there are exemptions for companies building U.S. plants. U.S. pharma stocks rose marginally on the news. Asian drug shares were hit hardest.
President Trump’s overnight decision to impose a 100% tariff on imported pharmaceuticals starting Oct. 1 is already whacking the stock prices of foreign drug companies as analysts struggle to digest how damaging the hit to the drug business will be.
“Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America,” the president said on social media. “‘IS BUILDING’ will be defined as, ‘breaking ground’ and/or ‘under construction.’ There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started.”
The bad news: The drug tariffs will be “a meaningful commercial hit for U.S. consumers,” according to Oxford Economics’ analyst Louise Loo. Exporters in China, Vietnam, and Malaysia will also be affected by a separate Section 232 probe that Trump ordered into whether the medical products they supply represent a national security vulnerability.
The good news: There are several loopholes in Trump’s proposal that mean the impact of the new taxes may be limited.
This morning, Asian drug companies saw their market caps trimmed as traders bailed out of foreign pharma stocks.
“Investors got a fresh reminder about the trade war, and the impact has already been evident in Asian markets. For instance, pharmaceutical companies have been among the worst performers this morning in Japan’s Nikkei (-0.46%), with losses for Chugai Pharmaceutical (-5.12%) and Sumitomo Pharma (-5.21%),” Jim Reid and the team at Deutsche Bank told clients today.
In Europe, Denmark’s Novo Nordisk fell 0.43%. Switzerland’s Roche was marginally down. France’s Sanofi, counterintuitively, was up 0.33% premarket (but that’s probably a dead cat bounce because it lost nearly 3% the day before).
In the U.S., by contrast, Pfizer rose 0.64% premarket. Eli Lilly was up 1.13%. Bristol-Myers Squibb grew 0.65%.
On its face, 100% tariffs look harsh. “Asia supplies just over 20% of U.S. pharmaceutical imports by value, a meaningful commercial hit for U.S. consumers at face value,” Oxford’s Loo wrote. But that implies the White House will be forced to relax some standards, she said. “We therefore expect the U.S. to follow up with announcements detailing protections for some categories of products, blunting the effective tariff burden.”
