Pharma tariffs would be ‘counterproductive,’ industry rep. says

00:00 Speaker A

Lot of headlines coming out of the pharma sector as companies brace for industry-specific tariffs. Joining me now, we got Yahoo Finance senior health reporter, Anjalee Khemlani.

00:12 Anjalee Khemlani

Hey, Josh, we know that today we heard some headlines potentially hinting towards a 15% tariff on pharma products out of Europe. That is still in flux, unclear if that does apply or if the industry is waiting for the 232 investigation that will end up resulting in some sort of tariffs. We know that Trump has indicated some level as high as 200% for tariffs on the pharma industry. But in the meantime, the companies have been looking for to the investments that they’ve made as a way to bypass that. We heard from the pharma trade group earlier today talking about how the further tariffs on medicines can increase cost and lead to shortages and that these tariffs on medicines will be counterproductive to the goal. Every dollar spent on tariffs is a dollar that could be used to advance American manufacturing or to develop innovative treatments and cures, indicating that of course those tariffs would have detrimental impact on the industry. We also did hear and had a chance to talk to AstraZeneca. That’s a UK-based company, big pharma company that has been really active in pushing its US image and really trying to call itself as CEO Pascal Soriot said today, an American company. We had a chance to speak to Aradhana Sarin, the CFO today and here’s what she had to say about tariffs.

02:35 Aradhana Sarin

In the US, majority of the product is supplied from the US and so forth in Europe. There is, you know, small minority of product, a handful of products, actually, that we still import from Europe into the US. But we do have excess capacity in the US to manufacture those products. Uh so what we’re you know we have 11 manufacturing sites in in the US. So our intention, once the tariffs, etc. were were announced and there was talks of tariffs in the short term was just managed through inventory to build more inventory in in the US. Um but we’ve also started tech transfers for those products which we do import and that those tech transfers would be completed within a within a year or so so that we can be fully, you know, not just have the majority but 100% of it being manufactured in in the US. This new facility that we announced was part of the plan anyway.

04:43 Anjalee Khemlani

So that new plan, that new facility in Virginia, part of that 50 billion investment is actually something that the company had already been planning and not a result of the tariffs. But again, the industry hoping that all of this goodwill will result in fewer or no tariffs.