Editor’s (re)View: Trump’s on-again, off-again pharma tariffs are getting old

Last week, President Donald Trump warned on Truth Social that starting Oct. 1 his administration would impose a 100% tariff on branded and patented pharmaceuticals, unless companies can prove they are building manufacturing plants in the United States. True to form, Trump’s social media bombast regarding tariffs was again short on truth and hurt his credibility.

Wednesday’s deadline came and went without going into effect, as Trump continues to pressure Big Pharma companies to lower their U.S. prescription drug prices in exchange for tariff relief. So far, Trump’s pharma tariff threats have worked as leverage in getting one major drugmaker to reduce its pricing.

At the White House on Tuesday, Pfizer announced an agreement to lower prescription drug prices, while securing for the company a three-year grace period from Section 232 investigation tariffs and pledging a $70 billion investment in U.S. R&D and manufacturing. In his remarks to the press, Trump said his administration is “working with other major pharmaceutical companies to secure similar agreements.” If they don’t agree, he warned “then we’re going to tariff them.” 

Pfizer CEO Albert Bourla acknowledged at Tuesday’s White House event that tariffs are the “most powerful tool to motivate behaviors, Mr. President, and clearly motivated ours.” Trump has been using the threat of pharma tariffs as leverage for his most- favored-nation (MFN) drug pricing policy. It’s a carrot-and-stick approach that appears to be working.  

William Blair analysts in a note to investors this week said that while the majority of large biopharma companies have already announced major commitments to invest in U.S. R&D and manufacturing, they expect more drug pricing deals to “further appease” the Trump administration.

Stephen Ubl, CEO of trade group Pharmaceutical Research and Manufacturers of America, issued a statement on Tuesday regarding Pfizer’s agreement with Trump, saying that “each company makes its own decision on how they set prices for medicines.”

Could drugmakers resist the pressure to strike pricing deals with the White House? In response, would these companies be slapped with punitive tariffs? And what about companies other than Big Pharma?

John Crowley, CEO of the trade group Biotechnology Innovation Organization, issued a statement last week regarding Trump’s threatened 100% tariff on branded and patented pharmaceuticals, warning that it would “devastate” the nation’s more than 3,000 small- and mid-sized biotechnology companies who “do not have access to the significant capital needed to immediately establish manufacturing in the U.S.”

Whatever the outcome, one thing is certain: Trump’s on-again, off-again pharma tariffs are getting old. Since the start of his second term, Trump has doubled, tripled, and quadrupled down on his threat to impose such tariffs. Now, they are being held over the heads of drugmakers as a cudgel to pressure them into making drug pricing concessions, which is weighing on the industry and creating uncertainty.