A pack of antibiotics and various other medications are located on the table in the pharmacy.
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European pharmaceutical companies are eager to prepare for the potential impact of U.S. import responsibilities, some forming a “tariff task force,” even as analysts warn that the imposition of the industry could violate global trade rules.
Fresnius Healthcare It said it has installed its first “tariff task force” to manage uncertainty surrounding trade allegations proposed by U.S. President Donald Trump, some of which production could be directly affected.
CEO Helen Giza told CNBC’s “Squawk Box Europe” last week: “Obviously, we are looking at tariffs in Europe and the situation of tariffs (ON) medical devices.
“We quickly as executive orders escalate and speed,” Giza said of the task force.
President Trump said on Wednesday that the EU may face Approved 25% tariff Exports to the United States reflect similar threats to Canada and Mexico. Trump said he is considering a flat fee for all drug, automobile and chip imports for a week.
The suggestion has attracted the attention of some analysts who say this responsibility in the pharmaceutical industry will mark an infringement of rules set by the World Trade Organization, which sees the United States as a member.
According to the WTO’s 1994 pharmaceutical agreement, most drugs and substances used to produce them are tax-free, giving them a tax-exempt level of constraint. However, Diederik Stadig, an economist at ING sector, said regulations may not be enough to prevent plans from White House leaders.
“I don’t think WTO infringement is enough to promote exemptions to reciprocal tariffs,” Stadig told CNBC via email on Monday.
Sydbank’s Pharma Equity analyst Soren Lontoft told CNBC by phone on Friday.
A White House spokesman did not immediately respond to CNBC’s request for comment on the possibility of trade violations. A spokesman for the WTO Secretariat said it “does not have specific actions (whether proposed or actual) to our members, but added that participants can raise concerns about the actions of other members or raise dispute resolution procedures.
Tariff Task Team
The uncertainty about Trump’s proposal and its feasibility is a major headache for European companies.
European pharmaceutical companies will be one of the biggest hits from the industry’s tariffs. According to ING’s calculations, the United States consumed about $560 billion worth of medicines in 2024, more than a third of which were imported, mainly from Ireland, Germany and Switzerland.
Stadiger in a notes last month.
Germany’s Fresnius Healthcare Services said that even if some of the company’s U.S.-based manufacturing remains insulated, tariffs could hit the group supplying dialysis machines and easy-to-use products to the U.S.
Alcon CEO David Endicott said Swiss-American pharmaceutical and medical device companies are “very paying attention to taxes.” Although limited exposure is seen at the direct, import-export level, Endicott noted potential problems with the company’s supply chain including raw material imports (including raw material imports).
“We didn’t see a lot of exposure here, but it’s a dynamic time,” he told CNBC on Wednesday.
Brian McNamara, CEO of UK multinational consumer health care HarrionMeanwhile, while the company’s sales come from domestic production, the business “has impacted through tariffs on a Canadian factory and several in Europe,” said Thursday.
One of the goals of Trump’s tariffs is to encourage companies to position production to promote domestic manufacturing in the United States. Nevertheless, economists questioned the logic of this strategy and the ability of companies to improve their capabilities in the timeline expected by the president.
“Building a manufacturing plant and using idle manufacturing capacity will take time,” Stadiger said. “Second, the economies of scale of production of general APIs (active pharmaceutical ingredients) in India and China are so large that in the third tariffs in the United States, the production of generic drugs may not necessarily be cheap, which will prove difficult to quickly source raw materials.”
Others warn that the additional taxation will only help increase the costs of the already expensive U.S. health care sector.
“Many companies have a global supply chain, so in one way or another it hurts companies or patients, or other members of the fairly complex U.S. healthcare system,” said Sydbank’s Lontoft.
