Novartis, Roche might be essentially the most in danger

Medications will be stored in a pharmacy in a pharmacy on May 12, 2025 in Los Angeles, California.

Eric Thayer | Getty pictures

President Donald Trump is expected to impose tariffs on pharmaceuticals in the United States every day – and according to some analysts, the duties may have a greater influence on some drugmakers than others.

Trump said reporters in the early this month that his administration would start implementing low pharmaceutical taxes on August 1 and increase the rate in about a year or 18 months. He threatened to impose up to 200% tariffs for imported drugs.

It is still unclear whether he will carry out this plan and the customs rate, which makes it difficult to have the directive on the production of active substances and patients. Domestic drug manufacturing companies also grow, since several companies have recently invested in order to build a good will with the president, but it will probably take a few years for these locations to be in operation.

Among other things, some analysts have estimated the potential college for various companies on the basis of their current production networks.

AbbviePresent Bristol Myers Squibb And Eli Lilly appear “relatively well positioned” because their manufacturing substances in the United States are greater than operations abroad Novartis And Roche Find more at risk, TD Cowen said analyst Steve Scala in a note on Monday.

Jefferie's analyst Michael Yee also called out in a note in March Amgen And Biogenic As the greatest exposure to tariffs among the biotech companies that he covers. Gilead And Spot point pharmaceuticals I will probably be less exposed, he said.

Biogen in May, however, was clarified during its earnings in the first quarter in May that it is only exposed to Trump's tariffs, even if pharmaceutical specific taxes are implemented. This is because a significant part of its US turnover from products of products in the federal states and also due to the company's current global existing positions.

Scala said that the tariffs will take a meaningful bite from the free cash flow of companies at least the first two years after their implementation. He said that this is based on a conversation with a nameless expert who is the former CFO of a pharmaceutical company.

This expert believes that drug manufacturers will be able to increase some drug prices, but increase them enough to be “politically unsustainable” because patients already have problems affecting drugs, said Scala. He said drug manufacturers could also cut the research and development expenditure, but added that the expert said that the most important cuts are unlikely, since innovation is the key to the long-term growth of every company.

The expert believes that pharmaceutical tariffs of more than 50% would be “problematic and punishable for the industry”, added Scala.

“In this scenario, companies would have to be very aggressive if they attribute production to the USA, and significant reductions in F&E would not be considered,” said Scala.

In the past few months, some pharmaceutical CEOs have hit up to imported medication, said they would violate research and development and could lead to fewer treatments for patients. Some of the health policy experts also announced CNBC that these taxes could disrupt the complex pharmaceutical supply chain, which increases the drug prices in the USA and worsen the lack of critical medicine.

In a statement, Roche said that it had a “robust presence” in the United States, which includes 15 research and development locations and 14 production facilities. The company also pointed out its recently announced plans to invest $ 50 billion in the United States

Roche said that pharmaceuticals and diagnostics should be freed from tariffs to “protect the patient's access, the care of chains and ultimately future innovations”. However, the company said that it is prepared for potential taxes and is certain that it is able to manage all effects and ensure that access to its products is not disturbed, which indicates reduction efforts such as inventory adjustments.

Spokesman for the other companies analysts, which were shown as the most risks of the tariffs, did not react immediately to inquiries about comments.

Drug makers most and least endangered

drug Companies have huge production networks, get active pharmaceutical ingredients from several sources and consider complex patents for intellectual property, said Scala in a separate note in April. He said that this leads to complicated tax and price strategies.

Scala said a large part of this information was not publicly available.

However, he estimated which companies apparently seem to be in a better or poorer position in a better or worse position for weather tariffs on the basis of important metrics, including the number and location of production facilities, the use of such facilities, the source of active substances and the location of the patents.

A sign stands in front of a Abbvie facility in Cambridge, Massachusetts.

Brian Snyder | Reuters

Scala said Abbvie, AstrazenecaPresent Eli LillyPresent Merchant And Pfizer Have the largest open US manufacturing networks, each with 10 main facilities.

But Abbvie, Bristol Myers Squibb and Eli Lilly are the only companies with more well -known large plants in the USA than abroad, he said. Abbvie and Eli Lilly have nine of these facilities abroad, while Bristol has Myers Squibb two.

These three companies also have the highest percentage in locations that are registered with the US Food and Drug Administration for the production of active pharmaceutical ingredients in the USA, while Daiichi Sankyo, Novartis and Zoetis have the least. Roche and Novo Nordisk According to the note, there are also a low percentage of active ingredients in the USA compared to the rest of the world.

GSK Has the largest pharmaceutical manufacturing network abroad with 31 open facilities. However, the company has announced that it would close some of these facilities, said Scala.

Other companies with large production levels abroad are Pfizer with 27 plants, Sanofi With 16, zoetis with 14 and Elanco With 11. Some drug makers, including Merck, Roche and Takedahave not announced how many important plants they have outside the United States, according to the note.

He said Ireland was a factor that is taken into account because it seems to be a specific goal for tariffs. Trump has repeatedly picked out Ireland for “Locking” US drug manufacturers with decades of corporate tax rates.

Abbvie and Merck have most of the FDA-registered pharmaceutical manufacturing facilities in Ireland. These facilities produce pharmaceuticals that have been distributed or imported in the United States

Some drug manufacturers, including GSK, Novartis and Roche, have no Irish manufacturing facilities at the FDA.

Jefferies' Yee raised Amgen and biogen as endangered companies based on their international tax advantages. He said Amgen had manufacturing transactions in Ireland and Singapore, which lowers the amount of taxes that they pay by 6%.

Biogen's significant production operations are in North Carolina and Switzerland. Yee said the company received a tax beneficiary of 8%because its profits are taxed abroad.

In comparison, Vertex and Gilead benefit less from these international tax advantages, said Yee. Vertex produces his medication in Boston.

He added that Gilead is present in Ireland, but mainly produces his medication in California and sells many of his HIV medication in the USA

When the Scala from TD Cowens asked companies how they could reduce the cost increases through tariffs, they pointed out several potential options. This includes researching alternative sources for active substances outside of Europe or the research of alternative contract manufacturing options at non-European locations such as the US territory Puerto Rico.