As President Donald Trump renewed his threat of potential pharmaceutical tariffs this week, trade group the Biotechnology Innovation Organization (BIO) is warning of the fallout the additional duties could have on patients’ access to medicines.
Nearly 90% of U.S. biotech companies rely on some imported materials for at least half of their FDA-approved products, a BIO survey conducted in February has found.
The survey—which polled emerging drugmakers all the way up to commercial companies with $1 billion or more in annual revenue—reflected industrywide concerns that the tariffs floated by the White House could hurt access to affordable drugs, stall innovation and impose needless red tape, BIO said in a Wednesday release.
Trump signed an executive order Feb. 1 to impose 10% tariffs—later doubled to 20%— on imports from China and 25% on those from Canada and Mexico. Then, in mid-February, the president floated “25% or higher tariffs” on pharmaceuticals, a threat that he doubled down on this week.
Digging deeper into the BIO survey results, 94% of companies polled said they expect tariffs on the EU to drive up manufacturing costs. Meanwhile, 82% of respondents figure tariffs on Canada will increase production costs, compared to 70% of respondents on China tariffs and 56% on India tariffs.
While manufacturing seemed to be the most consistent concern, the biotechs that responded to BIO’s survey also flagged fears that tariffs on multiple different countries and regions could scupper R&D, raw material sourcing, regulatory filings and partnerships with contractors such as CROs or CDMOs.
Specifically, 50% of the companies polled said they expect proposed tariffs on the EU will force them to search for new research and manufacturing partners, with around half of the respondents also noting potential European duties could necessitate reworking or delaying regulatory filings overseas.
While some companies may seek to modify their operations to avoid the burdens associated with tariffs, the timeline for such change is onerous, the survey results suggest.
On the question of how much time companies expect it will take to tweak their supply chains in light of the tariff threat, 44% of respondents said the process is likely to take more than two years. Thirty-six percent of respondents said they expect those changes to take between one and two years to implement, while just 21% said they think they could get that work done in less than 12 months.
In a statement, BIO’s CEO John Crowley said he supports policies and programs that encourage manufacturing on U.S. soil but that the survey “demonstrates the far reaching and potentially damaging impacts of the proposed tariffs on our biotechnology industry.”
While Crowley acknowledged that strengthening the U.S. manufacturing base is a noble cause, he caveated that the process would take years and that the industry and current administration should be mindful of the “negative consequences” of Trump’s proposed tariffs in the interim.
As for Trump’s renewed comments on potential “25% or higher” pharmaceutical tariffs, the president said at a Cabinet meeting Monday that his administration plans to announce those duties “at some point in the not too distant [future].”
It’s not immediately clear whether those industry-specific tariffs would replace or be added to other “reciprocal tariffs” on major U.S. trading partners like China and the EU, which Trump has said he plans to unveil April 2.
The U.S. is the world’s largest market for pharmaceuticals and imported some $210 billion in medicinal products in 2024, Politico reported earlier this week.
Meanwhile, as Trump dangles tariffs at least in part to boost domestic manufacturing, some drugmakers have already telegraphed plans to significantly upsize their investments in the U.S.
Late last month, Eli Lilly said it will invest $27 billion to kick off construction on four new production facilities in the U.S., more than doubling the sum the company has earmarked for American production since 2020. The company unveiled its plan for the quartet of plants, which Lilly CEO David Ricks dubbed “mega sites,” at a press conference called “Lilly in America.”
More recently, Johnson & Johnson last week telegraphed plans to spend $55 billion in the U.S. over the next four years, with a good chunk of that sum going toward the construction of three new manufacturing sites, plus expansions of other facilities already in J&J’s pharma and medtech network.