Trump has repeatedly called April 2 “Liberation Day,” alluding to a more sweeping and aggressive set of tariffs. Leerink Partners analysts said that the risks from Trump’s tariffs on the biopharma industry are “underappreciated.”
With tariffs on medical products now seemingly inevitable, pharma companies are lobbying the Trump administration to implement them in a phased manner, giving the companies some breathing room to shift their manufacturing and absorb the financial impacts of these changes, according to an exclusive report from Reuters Tuesday .
Citing sources who requested anonymity, Reuters revealed that the largest pharma players now see President Donald Trump’s tariffs as unavoidable and have instead shifted their lobbying goals to securing an incremental implementation. Rather than a 25% levy out the gate, the companies are asking Trump for lower tariffs initially, building up to the full 25% over time, according to the sources.
In a note to investors on Sunday, analysts at Leerink Partners said that the risks from Trump’s tariffs are “underappreciated.” The added duties “would drive up US drug prices for consumers, because even if companies were to redomicile manufacturing, it will take years and cost more than ex-US manufacturing.”
Leerink reiterated these concerns in a subsequent note on Tuesday, warning that April 2 “will just be the start of the process.” Trump’s “Liberation Day” policies will likely prompt retaliation from other countries. “Retaliatory action could include reciprocal tariffs, suspension of [intellectual property] protections, and other actions,” according to the note.
Leerink’s key opinion leader estimates that pharma tariffs could be in the range of 18% to 30%.
Tariffs have become Trump’s policy move of choice since being sworn in earlier this year. In recent weeks, Trump has been alluding to April 2 as “Liberation Day,” when he plans to unveil a new sweeping set of duties against other countries. On Tuesday, CNN reported that these new tariffs could go into effect immediately—much sooner than most had expected.
It is yet unclear how aggressive the “Liberation Day” tariffs will be, though according to Reuters’ sources, Trump is unlikely to announce pharma-specific levies on Wednesday.
In anticipation of these tariffs, several Big Pharma companies have started the costly process of reshoring their manufacturing operations. Earlier this month, for instance, Johnson & Johnson unveiled a $55 billion package to boost its production and R&D capabilities in the U.S. A few weeks earlier, Eli Lilly announced a $27 billion commitment to increase its U.S. footprint with four new production plants, to be constructed over the next five years.
Pfizer has also said that it is ready to reshore its manufacturing operations should the need arise. Speaking at the 45th TD Cowen Annual Health Care Conference last month, CEO Albert Bourla said that the pharma is well-positioned to shift its production into the U.S. “if something happens.”
