Drugmakers are asking the Trump administration and European Union officials to exempt medical products from growing tariff conflicts, seeking to avoid higher prices for popular drugs made in Ireland, such as Merck's cancer immunotherapy drug Keytruda and AbbVie's wrinkle treatment Botox.
Pharmaceutical industry representatives have argued in meetings with U.S. officials that EU tariffs would drive up drug prices and create barriers to patient access, potentially undermining priorities outlined in U.S. President Donald Trump's executive orders on health care, drug pricing and increasing American life expectancy, according to more than half a dozen industry sources with direct knowledge of the talks.
Three sources said some were willing to increase production in the U.S., pushing for tax breaks and regulatory changes that would make it easier.
“We are making it clear to the Trump administration and the European Union that patients will pay the price” for the tariffs, said a senior executive at a European drugmaker.
Industry executives also continue to urge officials in Brussels not to impose retaliatory tariffs even if Trump decides to include medicines in the trade dispute, several sources said. Some noted that life-saving drugs were excluded from sanctions against Russia after its invasion of Ukraine.
“We Western countries have interconnected supply chains in this area. Disrupting those flows will negatively impact patients’ access to life-saving medications,” said one top executive at a major European pharmaceutical company. “It’s a lose-lose situation.”
Pharmaceuticals have long been spared the fallout from trade conflicts because of the potential damage. But Trump’s decision to increase tariffs on goods from China, including finished drugs and raw materials, and the first round of U.S.-EU tariffs on products like steel and bourbon, have heightened concerns that drugs could be added to that list.
Most medical supplies imported from China have little monetary value. But the U.S. relies on drugs, some of which are produced in Europe, to generate hundreds of billions of dollars in revenue.
For example, Novo Nordisk partially produces its active pharmaceutical ingredient for the obesity injection Wegovy in Denmark, while Merck's mega-hit Keytruda and AbbVie's wrinkle treatment Botox are made in Ireland.
Novo Chief Executive Fruergaard Jorgensen said this month that his company would face short-term impacts from the tariffs but would ramp up domestic production of its drugs for the U.S. market. Last year, the company announced a $4.1 billion (€3.7 billion) investment to boost production in North Carolina.
Merck declined to comment on the situation. AbbVie also did not provide comments on where individual drugs are manufactured, but said it has a robust manufacturing network around the world.
The U.S. government, a significant buyer of drugs for its massive Medicare and Medicaid health programs, could face higher prices because of tariff costs, said Simon Baker, head of global biopharmaceutical research at Redburn Atlantic.
Emily Field, head of European pharma equity research at Barclays, told Reuters that until recently she had not thought prescription drug tariffs were a serious threat. Now, however, her “clients are constantly asking questions about it,” she added.
“Not broken”
Industry sources declined to comment on the Trump administration’s response to the reports. The president has previously announced tariffs on trading partners and then suspended or delayed them or granted waivers. One source noted that it was impossible to predict which of several trade philosophies would prevail in the White House.
Last week, Trump criticized Ireland for enticing pharmaceutical companies with tax breaks that are leading to “massive deficits.” White House officials did not immediately respond to a request for comment. The European Commission also declined to comment.
The COVID-19 pandemic has exposed the US and EU's dependence on China and India for raw materials to produce vital drugs.
Sourse: breakingnews.ie
