US Pharma Stocks Climb on 100% Pharmaceutical Import Tariff
The proposed policy, aimed at boosting domestic production, includes exemptions for companies investing in US manufacturing facilities.
Major US pharmaceutical manufacturers saw their stocks climb, with shares of Eli Lilly (LLY), Merck (MRK), and Pfizer (PFE) all rising over 1% following former President Donald Trump's announcement of a 100% tariff on imported pharmaceuticals. The policy, set to take effect October 1, 2025, is designed to aggressively incentivize the reshoring of drug manufacturing to the United States.
The core of the plan is a steep tariff on branded and patented drugs, but it includes a significant exemption: companies that are actively building or expanding manufacturing plants within the US will not be subject to the new import duties. This has been interpreted by the market as a direct benefit to domestic producers and those multinational firms willing to increase their American footprint. The move aims to and bolster the domestic supply chain.
In response, several major pharmaceutical companies have already signaled their commitment to expanding stateside operations. Eli Lilly has pledged $27 billion toward expanding its US manufacturing, while competitors like Novo Nordisk are also increasing their presence. Even international firms such as Swiss giants Novartis and Roche have and research facilities to circumvent the potential trade barrier.
Despite the apparent push for domestic investment, industry groups have voiced concerns. The Pharmaceutical Research and Manufacturers of America (PhRMA) has argued that funds spent on tariffs could divert capital away from crucial research and development efforts. However, some analysts believe the overall impact may be muted, as generic drugs are exempt and many large drugmakers already have significant US operations or were planning expansions. Key questions remain about , including how 'under construction' will be defined for the purposes of exemptions.