Pharmaceutical Tariffs ‘A Light At The End Of The Trump Tunnel’ For Big Pharma, Says Jefferies

Jefferies analyst Akash Tewari on Friday stated that President Trump’s proposed 100% tariff on pharmaceutical imports is “a win for Pharma.”

Trump said in a post on Truth Social on Thursday that the United States will impose a 100% tariff on branded and patented pharmaceutical products starting October 1 unless manufacturers are actively building plants in the country.

The analyst termed the news “a light at the end of the Trump tunnel” and noted that several large-cap pharmaceutical companies have already announced plans to build U.S. manufacturing facilities. Tewari further stated that the tariffs may not have a material effect on pharmaceutical companies.

Publicly traded large-cap drugmakers include AstraZeneca (AZN), Bristol Myers (BMY), Eli Lilly (LLY), GSK (GSK), Johnson & Johnson (JNJ), Merck (MRK), Novartis (NVS), Pfizer (PFE), Roche (RHHBY), and Sanofi (SNY).

In February, Eli Lilly and Company (LLY) announced its plans to bolster its domestic medicine production by building four new pharmaceutical manufacturing sites in the U.S., bringing the company’s total U.S. capital expansion commitments to more than $50 billion since 2020.

Novartis (NVS) in April announced a planned $23 billion investment over five years in U.S.-based infrastructure, ensuring all key Novartis medicines for U.S. patients will be made in the United States. Meanwhile, Sanofi in May said that it will invest at least $20 billion in the U.S. through 2030.

Last month, AbbVie announced a $195 million investment in its North Chicago, Illinois, manufacturing plant to expand domestic active pharmaceutical ingredient (API) production, as part of its commitment to invest more than $10 billion of capital in the U.S.

Merck, meanwhile, announced the start of construction for a $1 billion, 470,000-square-foot biologics center in Wilmington, Delaware, in late April. AstraZeneca and Roche each announced plans this summer to invest $50 billion in new or expanded facilities across multiple states.

Following the announcement by Trump on Thursday, LLY shares traded 1% higher in the pre-market session at the time of writing, while Merck (MRK) shares rose 1.4%. 

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