Insulin, heart treatments and antibiotics have fluid freely through many borders for decades, exempt from tariffs in an attempt to make medicine affordable. But that could change soon.
For months, President Trump has promised to impose higher rates on pharmaceutical products as part of his plan to reorder the global commercial system and return the United States to the United States. This month, he said that pharmaceutical tariffs could come in a “not very distant future.”
If they do, the measure would have serious, and very uncertain consequences, for drugs made in the European Union.
Pharmaceutical chemical products and products are export number 1 of the block to America. Among them are the Ozempic weight loss blockbuster, cancer treatments, cardiovascular drugs and flu vaccines. Most are fire medications that produce great gain in the US market, with their high prices and a fixed number of consumers.
“These are critical things that keep people alive,” said Léa Auffret, who directs international issues for Beuc, the European consumer organization. “Putting them in a commercial war is very worrying.”
European companies could react to Mr. Trump’s tariffs in several ways. Some pharmaceutical companies try to avoid rates have already announced plans to increase production in the United States, what Trump wants. Others could decide to move production there later.
Other companies seem to be stopping, but could increase their prices to cover tariffs, which increases costs for patients. And the highest prices could affect not only US consumers, but also patients in Europe. Some companies have begun to argue that Europe should create more favorable conditions for their businesses by dismantling some of the rules that keep the prices of medicines.
Or some midpoint could develop: colleagues could change their financial gains to the United States for accounting purposes to avoid import positions, even when they leave their physical factories abroad to avoid moving expenses and challenges of having.
The group of Mrs. Auffret already warned European officials that they should not return an attack on an attack against the important industry when Aracular American drugs in return: Tit would be a too serious cost for European consumers.
But the pharmaceutical sector is complicated. Agreements with insurance companies and government agencies can make it difficult to adjust the prices of brand medications, while government regulations can make both transfer and a long -term commitment difficult. The result is that no one can predict the result with confidence.
“We carry pharmaceutical products with rates in a long time,” said Brad W. Setser, an economist of the Foreign Council Council that has closely studied the fiscal rules that encourage production abroad.
Just when Trump has stopped his so -called “reciprocal” tariffs in favor of the rate at the level or a duration of 10 percent of the pause, he has left some specific tariffs of the industry and has cleaned that computer chips and pharmaceutical products enrich the following. The United States recently began investigations in both sectors, a first step to hit them with tariffs.
Many industry experts expect new rates to be 25 percent, in line with steel, aluminum and cars.
For the countries of the center of the pharmaceutical industry of Europe, possible tariffs are partially worrying. That is especially true for Ireland, where pharmaceutical products represent 80 percent of all exports to the United States.
Many pharmaceutical companies originally moved to Ireland because she sacrifices very low corporate tax rates. But he has also worked to develop his pharmaceutical industry and sacrifices access to a highly qualified workforce.
In recent years, the sector has grown rapidly. More than 90 pharmaceutical companies are now based there, according to the Foreign Direct Investment Agency in Ireland, and many of the largest American drug manufacturers have operations in the nation. Last year, the Ireland pharmaceutical industry exported 58 billion euros, or around $ 66 billion, in pharmaceutical and chemical products to the United States.
“The Irish are intelligent, yes, intelligent people,” Trump said in March, while Prime Minister Micheál Martin de Ireland visited the White House. “You took our pharmaceutical companies and other companies,” he said. “This beautiful island of five million people has the entire United States pharmaceutical industry in its experts.”
Now, tariffs could avoid the benefits of manufacturing there, which is the objective of Mr. Trump.
“In the United States, we no longer do our own drugs,” Trump said last week from the Oval office, adding that “pharmaceutical companies are in Ireland.”
Companies are already preparing. Companies have rushed to export their pharmaceutical products from Ireland and in the US market before the Gauntlet falls, statistics suggest.
Ireland is not the only affected country either. Germany, Belgium, Denmark and Slovenia are also important exhibitors.
“It is a huge problem for Europe,” said Penny Naas, who leads a competitiveness program for the group of experts, the German Marshall Fund and has worked for a long time on European public policies and corporate issues.
European leaders have been arriving at both US officials and industry. In addition to the recent visit of the Irish Prime Minister to the Oval Office, Ireland Foreign Minister traveled to Washington to meet with the Secretary of Commerce.
Ursula von der Leyen, president of the European Commission, the executive arm of the European Union, has in Brussels with the European Federation of Pharmaceutical Industries and Associations, the lobby group that represents the largest drug manufacturers in Europe.
The industry is filling the time to press for articles on the desire list, as less bureaucracy.
The European drug lobby group told Mrs. von der Leide that companies could change production or investment to the United States to limit their exposure to Mr. Trump’s rates, especially when the fastest approval and the easiest access to capital are making the United States more attractive.
At least 18 members of the group, which includes Bayer, Pfizer and Merck, have planned almost 165 billion euros in investments in the European Union in the next five years. Up to half of that could change to the United States, said the Federation. Nor is it alone in that prediction.
“Pharma needs more attractive conditions to produce in Europe,” said Dorothee Brakmann, director of Pharma Deutschland, the largest association of pharmaceutical companies in Germany.
Such warnings seem to have teeth. Some companies have begun to establish plans to spend more in the United States; The Roche firm announced last week an US investment plan of $ 50 billion, the last one in a series of such ads.
In comments published last week, the executive directors of Novartis and Sanofi suggested that less regulation was not enough to express bleeding. They argued that “European price controls and austerity measures reduce the attractiveness of their markets”, and that the block should pave the road for higher prices.
Industry executives have also warned that tariffs on the sector could interrupt supply lines, affect wet access and development and development.
“There is a reason” that medications tariffs are established for zero, said Joaquin Duato, executive director of the drug manufacturer Johnson & Johnson, in a recent earning calls. “It’s because tariffs can create interruptions in the supply chain, which leads to shortage.”
Mrs. von der Leyen has emphasized similar conerns, warning that tariffs on the risk of the pharmaceutical sector “implications for interconnected supply chains globally and the availability of medicines for European and American patients.”
Pharmaceutical tariffs also have another danger to the European Union.
The block has been trying to develop its ability to manufacture generic medicines, which are medically essential but much less profitable than brand brand products, and are often manufactured in Asia.
But if US tariffs mean that generic drug manufacturers in China and India are suddenly looking for customers outside the United States, could an avalanche of cheap pills for Europe.
That could make it difficult for the European Union to establish a national manufacturing base for genericians, even when the rates attract drug production from the names of the United States.
“We believe that this is likely to cause investment in the United States,” said DiDerik Stadig, Sectorial Economist of ING. “The European Commission must be in the ball.”
