With the introduction of new customs tariffs by the United States, the pharmaceutical sector finds itself in a delicate position, caught between opportunity and uncertainty. The executive order signed by President Donald Trump on April 2 has, for now, excluded pharmaceutical products from the imposition of general tariffs. However, the risk of indirect impacts cannot be ruled out—particularly for the production chain and international supply networks.
Exemptions and Grey Areas
One piece of good news for the pharmaceutical sector is that the executive order explicitly states that medicines will not be subject to additional tariffs. However, the lack of clarity regarding pharmaceutical active ingredients (APIs) raises concerns. These ingredients, which are essential for drug manufacturing, could be included in future protectionist measures—especially if they originate from countries with significant trade imbalances with the United States, such as China and India. These countries are among the world’s largest producers of APIs, and the imposition of tariffs on such components could lead to increased costs for both American pharmaceutical companies and European firms that rely on importing these raw materials.
Daphne Norberg, an analyst with the European Pharmaceutical Trade Alliance, noted that “a significant disruption in the supply of active ingredients could compromise the United States’ manufacturing capacity—particularly in the area of life-saving therapies, which depend on raw materials sourced from Asia.”
Authorizations and new medicines: a comparisonbetween the FDA and EMA
In 2024, the U.S. FDA approved 50 new drugs containing new active substances, while the European EMA authorized 46. This indicates a slight lead for the FDA in terms of new approvals, highlighting the importance of the U.S. market for European pharmaceutical companies.
Impact on Global Supply Chains
The pharmaceutical sector—one of the most globalized industries—relies on an extensive network of suppliers across the world. The current situation could lead to a bottleneck in supply chains, with shipping delays, increased logistics costs, and additional bureaucratic burden due to the introduction of new customs regulations. In a market already struggling with challenges linked to the pandemic, growing political uncertainty could further exacerbate risks related to pharmaceutical supply security, as emphasized by John C. Reynolds, CEO of Global Medics Supply.
Reynolds explained that “if tariffs were extended to APIs and intermediate products, we would face a full-blown supply crisis, particularly affecting generic drugs—a sector where both the United States and Europe are heavily dependent on imports.”
A market under pressure: The United States as a key market
The United States is one of the largest and most critical pharmaceutical markets for global companies. While the pharmaceutical sector has been excluded from direct tariffs, the introduction of duties on related sectors—such as industrial raw materials and electronic components (used in the manufacturing of medical devices)—could still negatively affect the competitiveness of U.S.-based pharmaceutical companies.
Christopher A. Bartlett, professor of global economics at Boston University, stated:
“Indirect tariffs targeting technology and materials essential to the pharmaceutical industry could drive up production costs and ultimately impact U.S. consumers, leading to higher drug prices.”
Pharmaceutical Import and Export Data Between the EU and the US
According to Eurostat, in 2023 the European Union exported medicinal and pharmaceutical products worth €277 billion to non-EU countries, with the United States as the main destination, accounting for 33.2% (€92 billion) of total exports. In the same year, EU imports in this sector amounted to €119 billion, highlighting a significant trade surplus of €158 billion.
A step toward Self-Sufficiency? Critical voices
Conflicting signals are emerging from Washington regarding the Trump administration’s long-term pharmaceutical policies. On one hand, the government has attempted to minimize the impact on pharmaceutical companies. On the other, internal voices are pushing for increased self-sufficiency in the production of critical medicines. The Department of Health and Human Services (HHS) has recently launched an initiative aimed at reducing reliance on foreign suppliers, focusing on domestic production of both active pharmaceutical ingredients and finished products.
However, implementing policies aimed at “bringing production back home” could clash with the global market openness that the pharmaceutical industry has operated within for decades.
The future: possible solutions and dialogue
As the U.S. market heads toward an uncertain future, the European Commission is already preparing a series of countermeasures to safeguard the sector. Ursula von der Leyen has announced plans to initiate a strategic dialogue with the United States to prevent an escalation of tariffs on raw materials and generic drugs, while also emphasizing the need to protect small and medium-sized enterprises, which could be hit hardest by such trade barriers.
At the same time, major international pharmaceutical organizations, such as the International Pharmaceutical Manufacturers Group (IPMG), are exploring the possibility of advocating for global solutions through the World Trade Organization (WTO). The aim is to ensure that growing trade instability does not hinder access to medicines or disrupt the distribution of life-saving therapies around the world.
The future of the pharmaceutical sector will therefore depend largely on the ability of international institutions to negotiate and mediate between economic sovereignty and the need to guarantee universal access to care.
Production strategies and commercial implications
European pharmaceutical companies are adopting diversified production strategies to serve the U.S. market. For example, Sanofi and Novartis operate manufacturing facilities both in Europe and the United States, allowing them to mitigate risks related to tariffs and supply chain disruptions. In contrast, companies with a less significant manufacturing presence in the U.S. may face greater challenges in the event of trade tensions.
Furthermore, the EMA has announced an expansion of its clinical data publication policy to include all new marketing authorization applications starting from the second quarter of 2025. This move aims to enhance transparency and could influence pharmaceutical companies’ drug approval strategies.