Donald Trump’s proposed tariffs on the EU would increase manufacturing costs for pharma companies and would stall medical innovation, according to the results of a recent survey by the Biotechnology Innovation Organization.
More than nine in 10 pharma companies believe that President Donald Trump’s proposed tariffs would pose a heavy burden on the industry, according to the results of a recent survey from the trade group Biotechnology Innovation Organization.
The survey sought input from various biopharma companies, ranging from start-ups and small players to industry powerhouses that bring in more than $1 billion in revenue. The results showed that 94% of the participating companies said that tariffs on imports from the European Union would mean “surging manufacturing costs” for them, according to a Wednesday news release from BIO.
Meanwhile, additional duties on imports and business from the EU would push half of the surveyed firms to look for new research and manufacturing partners. About half of of companies responding to the survey said they would also need to “rework or potentially delay regulatory filings,” in turn stalling medical and scientific innovation.
BIO CEO John Crowley said in a statement on Wednesday that the group agrees that reshoring “key parts of the biotechnology supply chain,” such as manufacturing, “should be a high priority for both national and economic security.” But he cautions that this shift “will take years” and that the industry and lawmakers “need to be mindful of the negative consequences of these proposed tariffs.”
Last month, shortly after his inauguration, Trump announced that he would be imposing a 25% tariff on imports from Canada and Mexico, while hitting China with 10% tariffs. Early in March Trump wavered, delaying tariffs on automobiles from Canada and Mexico until early April. Trump has since added the EU to this list, also eyeing a 25% levy on products made in the region, as per reporting from the BBC last month.
Trump doubled down on his tariff threats on Monday, taking specific aim at automobile and pharmaceutical products. These additional duties will be coming “in the very near future,” he said.
While the Trump administration has yet to formally impose pharmaceutical tariffs, 80% of companies surveyed by BIO estimate that they will need at least a year to look for additional suppliers if they do go through. More than 40% said that they would need more than two years. These delays, according to BIO’s release, “could disrupt the pipeline of breakthrough treatments.”
In response to Trump’s threats, many big pharma players have already started working on reshoring their manufacturing operations. Lilly last month announced a $27 billion expansion of its U.S. footprint, involving four new production plants set to rise over the next five years. Merck soon followed suit, announcing a $1 billion investment for its vaccine production capabilities in the U.S. J&J last week likewise unveiled a $55 billion boost to its U.S. manufacturing operations.
