Until now, Trump has focused on medication in the customs war

In recent weeks he has already imposed rates on raw materials and provisional products from China that the industry uses, and has repeatedly criticized drug production in Europe.

He wants to target this with a separate announcement of customs. The taxes could be “25 percent or more”, he had promised. There is an overview of Trump’s plans, the reactions of the pharmaceutical industry and possible consequences.

What Trump accuses the pharmaceutical industry
Trump demands that large pharmaceutical companies such as Eli Lilly, Pfizer and Johnson & Johnson produce more medication for US patients in their own country to reduce dependence on abroad and to increase tax revenues. Many original preparations are partially manufactured in Europe, especially in Ireland, where low corporation tax applies. Important active ingredients are made for Lilly’s weight loss sprayer or the Keytruda Cancer Immunotherapy by Merck & Co.

Trump also criticizes that US pharmaceuticals register intellectual property in Ireland to take advantage of the lower tax rates. He also complains that the United States itself has no longer produced enough antibiotics – these and many generic medicines are mainly from China and India.

The US President also complains about the high prices for original medication in the US compared to other rich countries, especially in Europe: “These countries are smart,” he said. “They say that you should not ask for more than $ 88, otherwise you cannot sell your product, and the pharmaceutical companies listen to them.”

In contrast to countries such as Germany or England that buy medication centrally for their health systems, the United States usually leaves price negotiations private providers. It was only under the previous President Joe Biden that the US government was starting to negotiate prices for some medicines from the State Medicare programs.

How the industry reacts
According to insiders, pharmaceutical companies are gradually urgent to introduce rates to reduce the effects of taxes and to have time to convert production. Various companies, including Eli Lilly, have announced since Trump’s office to increase their investments in production in the United States. The Danish group Novo Nordisk and others also referred to efforts to deliver more medication for the American market in the country. However, the PHRMA Industry Association emphasizes that the construction of a new production facility in the US can take up to $ 2 billion and can last five to ten years – an argument of the industry at immediate rates. Some companies have already increased the inventory by bringing medication from Europe to the US through air freight.

When can the rates come?
In addition to wood, semiconductors and other sectors, last week the regulation of Trump in addition to wood, semiconductors and other sectors, which can be investigated in accordance with section 232 of the commercial law of 1962 to determine the effects of import on the national security of the United States. The Ministry of Trade must complete the investigation within 270 days. Trump did not mention any accurate time. On April 8, however, he said that an announcement about pharmaceutical rates would follow “very soon” without going the test procedure.

What are the consequences of the rates?
Representatives of industry and experts in pharmaceutical prices warn that rates can increase the risk of bottlenecks in favorable generic medicines such as antibiotics, because manufacturers could no longer afford production due to the extra costs. The rates can also reduce the profit currents of expensive brand medicines and biotech medicines, so that pharmaceutical manufacturers have less money for investments in the research and development of future medicines.