- Analysts expect Asian drugmakers’ focus on generics to limit impact
- Japan says its trade deal will keep pharma tariffs competitive with EU
- Tariffs had already been reflected in company valuations
Shares of U.S. and European pharmaceutical firms were little changed on Friday, while Asian drugmakers declined, after President Donald Trump announced 100% tariffs on branded drugs imported by firms that are not building plants in the U.S.
Analysts said the move was widely expected and unlikely to materially hit the industry, given that most drugmakers have pledged billions of dollars in U.S. manufacturing investments.
Lorraine Tan, director of equity research for Asia at Morningstar, said the final tariff rate should be lower given the pattern of negotiations so far, but that near-term uncertainty could weigh on share prices.
Other analysts expected a limited impact on Asian drugmakers, as many focus on generic drugs, especially in China and India. Europe and Japan should also get some shelter as a result of trade deals, although industry representatives said this was not yet clear.
The European Union has a trade deal with the U.S. for a 15% tariff on goods, including pharmaceuticals, while Japan has an agreement that its tariff rates will not exceed others including the EU, Tokyo’s trade negotiator said on Friday.
“The market is calling (Trump’s) bluff,” said Ken Peng, head of Asia investment strategy at Citi Wealth.
“We see some Asian pharma names down pretty significantly today, but if people really believe that large swathes of branded pharma will be tariffed at 100%, it wouldn’t be a 3% correction.”
US INVESTMENT RUSH
Around 60% of U.S. pharma imports in 2024 came from the European Union, according to U.N. Comtrade data.
