President Donald Trump’s plan to impose 100% duties on branded and patent -patented drugs threatens to raise the cost of industries abruptly drug that do not have production capacity in USA. This initiative is exerting increasing pressure on pharmaceutical companies that have not yet invested in domestic production, bringing them to a significant competitive disadvantage.
This move may double the cost of top remedies of the global drug industry, from cancer immunotherapy to weight loss injections if the US construction does not begin until the deadline of 1 October. Although companies such as Novartis AG and Sanofi SA have announced significant investments in the US, it remains unclear whether these projects have been implemented on the basis of public disclosures, according to Bloomberg.
Merck, Novo Nordisk and Eli Lilly have launched in 2023 construction projects in the US, with construction sites in states such as Dellaguer, North Carolina and Texas. Investments are aimed at strengthening supply chains in the US and supporting drugs successfully in treatments for cancer, diabetes and immunological diseases.
AbbVie, who markets the drug for Imbrruvica cancer and produces Skyrizi immune success, said it will begin expanding its facilities in Illinois this autumn.
The proposed tariffs could affect the imports of medicinal products worth about $ 220 billion, increasing the average tariff rate by 3.3 percentage points. It remains, however, an uncertainty about whether countries with trade agreements with the US will be excluded from the new measures.
For example, the European Union’s trade agreement from the end of July has stated that the duties on the drugs would be 15% and it is not clear if the regulation cancels the last tax.
Operational impact
“The operational impact is probably limited to the pharmaceutical industries in Asia. For Japan, it is more likely to affect the climate, but less the fundamental sizes, “said Tony Ren, head of Asia’s healthcare research in Macquarie Securities Ltd, adding that few Chinese, Indian or Korean companies sell branded drugs in the US.
However, the shares of large pharmaceutical companies collapsed in Tokyo, Seoul and Hong Kong after the announcement, as investors weighted the risk of Japanese successful companies such as Chugai Pharmaceutical Co. and the Enhertu of Daiichi Sankyo Co.
In the meantime, Shionogi & Co. He still thinks whether he will convey the production of antibiotics used to treat bacterial infections by multiple drug resistance to the US, as he said in August.
Novartis, Sanofi, Chugai and other Japanese pharmaceutical companies did not immediately respond to requests for commentary.
Trump’s latest attack is likely to spark a road race in the US, especially in facilities managed by third parties that undertake research, development and manufacture of pharmaceutical brands.
Fujifilm Holdings, a biotechnology company with a contract recently opened a plant in North Carolina, which is considered one of the largest cell bio -growing units in North America, rose up to 5.2% on the Tokyo Stock Exchange on Friday.
Limited report
Only one handful of Chinese companies sell branded drugs in the US, mainly through multinational partners.
“Most Chinese pharmaceutical/biotechnology companies are immune given the model of cooperation” with multinational companies, said Cui Cui, head of Asia Minor in Asia Minor in Jefferies.
Only Beone Medicines, a Switzerland -based Chinese company, notes significant sales in the US, said Nomura International analysts led by Jialin Zhang. The treatment of Brukinsa cancer is partially prepared by an American contractor, which emphasizes the difficulty of defining what is considered imported.
Duties could affect Chinese companies’ long -term plans to expand immediately to the US, Morgan Stanley analysts said in their note. Their “approach” to directing their activities in the US, with many seeking to sell their innovative treatments to American patients, “can face another level of uncertainty if tariff barriers are going to remain,” analysts said.