Pharmaceutical companies in the EU have warned of a “risk of exodus” to the US as stocks in the sector slid around the world following Donald Trump’s renewed threat to impose tariffs on drugs imported into the US.
Sector-Wide Market Slump Follows Trump’s Tariff Comments
Drugmakers’ shares across Europe and India fell sharply on Wednesday. Trump indicated that further tariffs were on the way, in addition to the 20% “reciprocal tariffs” on imports that took effect overnight.
A basket of European healthcare stocks fell 3.9% at opening, reaching its lowest level since October 2022. This marked the largest decline among sectoral indices on the Stoxx 600, which was down 2.3% in early trading. Shares in major drugmakers were hit hard:
- AstraZeneca: down more than 5%
- GSK: down more than 4%
- Roche: down 5.6%
- Sanofi: also down more than 5%
Impact Spreads to India’s Pharma Giants
There was a knock-on effect in India, where major pharmaceutical manufacturers such as Teva—key suppliers of branded paracetamol and active pharmaceutical ingredients—also saw losses.
Trump imposed fresh tariffs on imports from 57 countries and territories at midnight US eastern time. These included:
- 20% on goods from the EU’s 27 member states
- 104% on China
- 27% on India
These followed an earlier 10% blanket tariff on imports from all countries imposed over the weekend.
Pharmaceuticals Next in Line, Trump Warns
While pharmaceuticals had previously been exempt from these levies, Trump told an event at the National Republican Congressional Committee on Tuesday evening that a large tariff on drug imports would be announced “very shortly”.
“We’re going to tariff our pharmaceuticals and once we do that they are going to come rushing back into our country because we are the big market,” Trump said. “The advantages we have over everybody is that we’re the big market. So we’re going to be announcing very shortly a major tariff on pharmaceuticals.”
EU Industry Urges Von der Leyen to Act Fast
EU pharmaceutical firms called on European Commission president Ursula von der Leyen to implement “rapid and radical action” to prevent an exodus to the US. This appeal came during a meeting in Brussels.
The European Federation of Pharmaceutical Industries and Associations (EFPIA)—representing companies including Bayer, Novartis, and Novo Nordisk—met von der Leyen just hours before Trump issued his fresh threat.
Other EFPIA members include Pfizer, Lilly, Gilead, GSK, Teva, and Merck, collectively responsible for billions in exports to the US.
Ireland’s €44bn Pharma Exports at Risk
The latest comments have intensified concerns in pharmaceutical manufacturing hubs such as Ireland, which exported €44bn worth of pharmaceuticals to the US in 2024—much of it produced by US multinationals that Trump aims to bring back stateside.
EFPIA: “Pharma CEOs Alert President Von der Leyen to Risk of Exodus”
In its first statement since Trump’s “liberation day,” EFPIA said, “Unless Europe delivers rapid, radical policy change then pharmaceutical research, development and manufacturing is increasingly likely to be directed towards the US.”
The group added that capital expenditure and R&D were at immediate risk. According to EFPIA, €164.8bn in investment is planned by pharma companies in the EU between 2025 and 2029.
“Over the next three months, companies that responded estimate that a total of €16.5bn, ie 10% of the total investment plans, is at risk,” EFPIA stated.
US Gaining Ground on Investment Incentives
EFPIA warned that the US now outperforms Europe “on every investor metric,” including:
- Availability of capital
- Intellectual property protections
- Speed of approval
- Rewards for innovation
“Now with the addition of tariffs, there is little incentive to invest in the EU and significant drivers to relocate to the US,” the association warned.
Pharma Industry Submits Five-Point Plan
EFPIA presented von der Leyen with a five-point plan to retain pharmaceutical investments in Europe. Key proposals include:
- Strengthening incentives to locate intellectual property in Europe
- Adopting a global set of rules to enhance Europe’s appeal for innovation, research, and development
The pharmaceutical industry now awaits concrete steps from EU leadership as the threat of tariffs looms large and the pull of the US market grows stronger.
