At 25% could the duties of USA In imported drugs, as said by the lead economist of the German Pharmaceutical Association (VFA), Claus Michelsen.
The only, perhaps, way to avoid these duties is the major European pharmaceutical companies, according to him, would be investing in the US. “The automaker was successful with this strategy during Trump’s first term,” he said In Wirtschaftswoche the Michelsen, saying that Pharmaceutical companies, such as Roche and Novartis, want to invest billions in the US. “At least this is hope,” he said.
The question is whether Trump can be convinced fairly quickly, because It is not possible to transfer much of production to the US in the short termas the chief economist of VFA. So far, Roche and Novartis have stated that The next five years want to make investment In the US $ 50 billion and $ 23 billion, respectively.
“These are already significant amounts. Most important, however, is that a political agreement is required. The US and the European Commission must find a common outlet from the trade conflict and the EU’s proposal to abolish all duties is the right direction, “he said.
By imposing duties on imported drugs, Trump has two targets, according to Michelsen. First, to reduce US dependence on drug imports from abroad, especially China and India, and secondly, to reduce the trade deficit. Undoubtedly, it helps if pharmaceuticals are investing more in the US, but it is a significant burden for Europe if investment is increasingly channeled there.
The US Department of Commerce is currently investigating whether US national security is jeopardized by the high number of drug imports. The survey will be completed faster, as estimated by Michelsen, and sThe president will then have 90 days to take commercial policy measures. “Trump has repeatedly announced that he will act. Whether he really does, remains to be seen. In other cases, such as cars or steel, it has imposed high duties, “he said.
How do companies react?
“The climate between our member companies in the Association of Pharmaceutical Companies, based on research, is tense. Have never been in the past duties in medicines, “he noted The leading economist of the VFA Pharmaceutical Union, saying that “the drugs were excluded from trade disputes for good reasons”.
At the same time, companies whose production facilities are mainly in Europe, such as well -known German manufacturers, face major challenges. Recently one quarter of all German pharmaceutical exports only headed to the US.
“They will not always be able to convey the highest prices resulting from customs charges. Will lose either sales or profit margins. In the worst case, exports will no longer be worth it. All this is bad news for patients, especially in the US, as either the cost of care is increased or the availability of drugs is reduced, “the economist said.
Concerning how much the US depends on European drugs, Michelsen emphasized that “there are mutual dependencies. For example, the US is supplying large quantities of vaccines or immunological products, as well as insulin or antibiotics from Europe, as well as certain blood products, which are then needed to produce anti -cancer drugs and for the development of cell and gene therapies in the US. “
“In these cases, there may be deficiencies of supply and involvement in the US due to customs duties. Conversely, Europe also depends on drugs and precursors from the US, “he concluded.
China is one of the largest producers in the world of cheap standard drugs, such as antibiotics or drugs for high blood pressure. In the hypothetical scenario where exports to the US are no longer worth it, most of these drugs could end up in Europe and Germany.
“This could at least reduce some supply stiflers in this country. On the other hand, it will increase the supply of drug supplies from China. For some established manufacturers, it is likely to be a special challenge if standard medicines soon reach Germany and Europe at even lower prices, “the lead economist said.