Editor’s (re)View: US-EU trade deal puts pharma industry at substantial fiscal risk: GlobalData

Aug. 1, 2025
The agreement includes a 15% tariff on branded pharmaceutical products imported from the European Union to the United States, elevating costs across the pharma value chain.

The Trump administration’s tariffs dominated this week’s news. The week started with a trade agreement between the U.S. and the European Union that includes a 15% tariff on branded pharmaceutical products imported from the EU.

While the 15% rate is half what the EU’s 27 nations were facing in a potential 30% tariff that was slated to go into effect on Aug. 1, it is still a major hit to the pharmaceutical industry. Although some analysts this week said they do not expect it to have a significant financial impact, others project tariffs could increase industry costs by $13 billion to $19 billion annually.

Data and analytics firm GlobalData did not mince words in its Aug. 1 assessment, concluding that the U.S.-EU trade deal puts the pharmaceutical industry at substantial fiscal risk, which threatens to elevate costs across the pharma value chain.

“Companies manufacturing pharmaceutical products in Europe will need to anticipate financial exposure when planning launches in the U.S. due to the unfavorable gross to net dynamics, weakened pricing leverage with U.S. payers, and slower commercial uptake as insurers reassess cost effectiveness due to the tariffs,” according to analysts on GlobalData’s Pharma Strategic Intelligence team.

In announcing the trade agreement, European Commission President Ursula von der Leyen in a statement said the framework with the U.S. “creates certainty in uncertain times” with a single 15% tariff rate for the vast majority of EU exports, including pharmaceuticals.

However, GlobalData warned that the U.S.-EU trade deal has increased the level of uncertainty within the pharmaceutical industry, raising concerns on the potential of tariffs increasing past 15% in the future.

While the full impact of the current 15% tariff will take time to unfold, the analysts said it will be interesting to see the adoption of different mitigation strategies by the pharmaceutical industry.

Separate from the EU trade deal, Celltrion has been closely monitoring the evolving U.S. pharmaceutical tariff policies and has proactively developed a strategy to try to minimize the impact. The South Korean manufacturer and exporter of biosimilars announced this week that it has been designated as the preferred bidder for the acquisition of an undisclosed U.S. biologics manufacturing plant.

As a potential long-term response to tariffs, Celltrion earlier this year said it is evaluating the acquisition or establishment of manufacturing facilities in the U.S. capable of producing both finished drug products and drug substances to “create a stable supply chain that is less affected by political and social changes in the U.S.”

GlobalData noted some major drugmakers, including AstraZeneca and Johnson & Johnson, have in recent months committed to investing tens of billions of dollars to boost their U.S. manufacturing footprints.

However, Darrell West, a senior fellow at the Brookings Institution, in a July 31 commentary — What constitutes manufacturing success? — pointed out that metrics such as labor productivity, manufacturing output, and trade deficits will be released in the coming months which will reveal whether or not Trump’s goals have been achieved.

About the Author

Greg Slabodkin | Editor in Chief

As Editor in Chief, Greg oversees all aspects of planning, managing and producing the content for Pharma Manufacturing’s print magazines, website, digital products, and in-person events, as well as the daily operations of its editorial team.

For more than 20 years, Greg has covered the healthcare, life sciences, and medical device industries for several trade publications. He is the recipient of a Post-Newsweek Business Information Editorial Excellence Award for his news reporting and a Gold Award for Best Case Study from the American Society of Healthcare Publication Editors. In addition, Greg is a Healthcare Fellow from the Society for Advancing Business Editing and Writing.

When not covering the pharma manufacturing industry, he is an avid Buffalo Bills football fan, likes to kayak and plays guitar.