Editor’s (re)View: Industry pushes back on tariffs in comments to Trump administration probe of pharma imports

A flood of public comments from the biopharma industry have been posted on the Regulations.gov website in response to the Trump administration’s ongoing investigation into whether the importation of certain pharmaceuticals and pharma ingredients threatens U.S. national security. Not surprisingly, most comments on the Department of Commerce probe are decidedly negative on the idea of industry-specific tariffs.

Launched under Section 232 of the Trade Expansion Act of 1962, the Department of Commerce investigation is looking into the extent to which domestic production of pharmaceuticals and pharma ingredients can meet demand, the feasibility of increasing domestic capacity to reduce import reliance, and whether tariffs are necessary to protect U.S. national security.

The Pharmaceutical Research and Manufacturers of America (PhRMA) in its comments urged the Department of Commerce to focus its probe on “targeted strategic national security concerns, rather than imposing tariffs on innovative medicines that would not advance the Administration’s goal of enhancing national security nor address the trade barriers faced by the industry in foreign markets.”

PhRMA emphasized that tariffs “are not the answer for promoting greater domestic production of these products” and that the industry already has a strong U.S. manufacturing presence and is making “major investments” that tariffs “would jeopardize.”

Still, President Trump has repeatedly threatened to impose tariffs on pharmaceuticals to pressure drugmakers to bring manufacturing back to the U.S. It’s a threat that appears to be working with some Big Pharma companies including AbbVie, Bristol Myers Squibb, Eli Lilly, Gilead Sciences, Johnson & Johnson, Novartis, Roche, Sanofi, and Takeda — all of whom have recently pledged billions of dollars in U.S. investment.

Eli Lilly recently announced plans to invest $27 billion to build four new U.S. pharmaceutical manufacturing sites. However, in its comments on the Department of Commerce probe, Lilly warned that “some measures — like tariffs — that increase the cost of medicines or decrease the capital available to manufacturers will actually worsen the problem this Administration seeks to address.”

Earlier this month, Gilead Sciences committed to expanding its U.S. manufacturing with an $11 billion investment in new and upgraded facilities. In its comments on the Department of Commerce investigation, the company warned that tariffs “would raise the cost of our current operations and planned billion-dollar investments in the U.S.” and “could disrupt our resilient supply chain network with trusted partners, interrupt medicine supply, potentially leading to drug shortages.”

Danish drugmaker Novo Nordisk has so far refrained from making such high-dollar public commitments to investing in the U.S., while strongly urging the Department of Commerce in its probe to not recommend the imposition of industry-specific tariffs.

“Tariffs on imports of Novo Nordisk’s products and the inputs on which its U.S. manufacturing operations rely will result in severe supply chain disruptions and market instability,” the company warned in its comments. “Such disruptions will hinder patient access to medication, increase prices of medications, and — by requiring us to divert resources to account for new tariffs — could significantly hamper and delay our continued and future investments in the United States.”

Novo Nordisk noted in its comments that over the past decade it has invested more than $24 billion in the U.S. to expand manufacturing capacity and R&D “facilitated by the corporate tax policy implemented through the 2017 Tax Cuts and Jobs Act.” They are the latest Big Pharma company to credit the legislation signed into law during Trump’s first administration for increased investment in this country.

The Biotechnology Innovation Organization (BIO) in its comments claimed that “more than $500 billion has been pledged toward domestic manufacturing, building on five years of increased investment largely driven by the pro-growth tax environment created by the 2017 Tax Cuts and Jobs Act.” At the same time, BIO warned that imposing tariffs “would undermine — rather than advance — the goal of strengthening U.S. biomanufacturing.”

While the public comment period has now ended, the Department of Commerce investigation has 270 days to provide a report to Trump and 90 days for him to determine whether trade measures such as tariffs should be imposed on pharmaceuticals.