Pfizer CEO says tariff uncertainty puts a damper on its US manufacturing investment
The Trump administration’s threat of imposing tariffs on pharmaceuticals is putting a damper on Pfizer’s investment in U.S. manufacturing and research and development, according to CEO Albert Bourla.
During the company’s first-quarter earnings call on Tuesday, Bourla told analysts that “in periods of uncertainty, everybody is controlling their costs — as we are doing — and then is very frugal with their investments, as we are doing so that we are prepared for rainy day.”
Trump has threatened to impose tariffs on pharmaceuticals to pressure drugmakers to reshore manufacturing to the U.S. and reduce reliance on China and other foreign supply chains. However, Bourla said on the earnings call that tariff uncertainty is having the opposite effect and is deterring further U.S. investment from Pfizer.
“If I know that there will not be tariffs and a heavy certainty, then there are tremendous investments that can happen in this country, both in R&D and manufacturing,” Bourla said.
Last month, Bourla told the TD Cowen Annual Health Care Conference that Pfizer’s 13 production sites in this country are “probably” the largest U.S. manufacturing network of any pharmaceutical company, with some “mega” sterile injectables facilities.
“We have all the capabilities here and the manufacturing sites are operating in good capacity right now,” Bourla said. “If something happens, we will try to mitigate by transferring from manufacturing sites outside to manufacturing sites here — the things that can be transferred quickly. We don’t have to build the network.”
However, on Tuesday’s earnings call, TD Cowen analyst Steve Scala called into question Pfizer’s ability to transfer to transfer overseas manufacturing to its 13 U.S. sites if Trump imposes tariffs on pharmaceuticals.
“It is great to have this vast network in the U.S. but if there’s little or no excess capacity or flexibility, then it’s a more limited advantage,” Scala said, who asked Bourla what the percent utilization is at the company’s U.S. plants.
Bourla declined to provide details but said Pfizer has “huge manufacturing capacity right now in the U.S., particularly for everything that is injectable” and “without the need to build new facilities, just utilize the current ones and transfer production there.”
Financial impact of tariffs
On Tuesday’s call, Pfizer said it expects $150 million in costs this year from Trump’s current tariffs. While the company has not revised its full-year 2025 outlook of revenues in the range of $61 billion to $64 billion, it noted in its Q1 financial results that the guidance “does not currently include any potential impact related to future tariffs and trade policy changes, which we are unable to predict at this time.”
CFO Dave Denton told analysts the pharmaceutical industry is “currently navigating a complex global landscape shaped by rapidly evolving trade and tariff policies.” Denton said Pfizer has created a cross-functional team to “analyze a range of potential outcomes while developing strategies to help us mitigate the potential impact to our business in both the short as well as the long term.”
Among the mitigation options that Pfizer is considering putting in place: managing current inventory levels, leveraging its domestic manufacturing footprint, and the potentially producing certain active pharmaceutical ingredients (APIs) and products in the U.S.
“If there are tariffs, we have detailed contingency plans that are minimizing the impact,” Bourla said, while acknowledging that “transferring manufacturing, even under the most lucrative investments available and even under the most favorable regulatory framework … it’s a multi-, multi-year process — so it’s not something that can be resolved within a year.”
At the same time, Denton said Pfizer’s “focus on cost management across our manufacturing network will remain a priority” and that the first phase of its Manufacturing Optimization Program is on track to deliver approximately $1.5 billion in net cost savings by the end of 2027, with initial savings anticipated in the latter part of 2025.
