Pharmaceutical companies in the EU have warned of a “risk of exodus” to the US as stocks in the sector slid around the world on the back of Donald Trump’s renewed threat to impose tariffs on US drugs imports.
Drugmakers’ shares across Europe and India, another foreign pharma hub, slipped on Wednesday after Trump indicated that further carnage was on the way in addition to the 20% “reciprocal tariffs” on imports that kicked in overnight.
A basket of European healthcare stocks, the Stoxx 600 Health Care index, which has been declining in value since Trump first threatened tariffs in March, was down 5.9% on the day.
AstraZeneca, a star performer during Covid, and the French giant Sanofi were among the worst hit, falling 7% and 6.4%, while the British company GSK was down 5.71% and the Swiss companies Novartis and Roche were down nearly 6%.
India was also affected, where companies such as Teva are among the world’s biggest medicine manufacturers, making everything from branded paracetamol to active ingredients in pharmaceutical products through manufacturing contracts with some of the world’s biggest brands.
Trump imposed fresh tariffs on imports from 57 countries and territories at midnight US eastern time, including a 20% levy on goods from the EU’s 27 member states, 104% on China and 27% on India. These followed 10% tariffs on imports from all countries imposed over the weekend.
Pharmaceuticals have so far been exempted from the levies, but on Tuesday evening the US president told an event at the National Republican Congressional Committee that he would announce a large tariff on drugs imports “very shortly”.
Trump claimed the tariff would incentivise drug companies to move their operations to the US, but has not said when and by how much he plans to raise the levy.
EU pharma firms have called on the European Commission president, Ursula von der Leyen, to push for “rapid and radical action” to mitigate the “risk of exodus” to the US after a meeting in Brussels.
The European Federation of Pharmaceutical Industries and Associations (EFPIA), whose members including Bayer, Novartis and Novo Nordisk, the maker of the diabetes type 2 drug Ozempic, met von der Leyen on Tuesday, hours before Trump issued his fresh threat. Other members include Pfizer, Lilly, Gilead, GSK, Teva and Merck, together representing billions of exports to the US.
Trump’s latest comments have intensified the trepidation felt in pharma manufacturing hubs around Europe including Ireland, which exported €44bn (£38bn) of pharmaceuticals to the US in 2024, much of it made by US multinationals Trump wants to repatriate.
“We’re going to tariff our pharmaceuticals and once we do that they are going to come rushing back into our country because we are the big market, the advantages we have over everybody is that we’re the big market,” the US president said at an evening speech to Republican supporters.
“So we’re going to be announcing very shortly a major tariff on pharmaceuticals.”
The pharma industry in the EU has remained silent on the threat of tariffs since Trump’s “liberation day”.
EFPIA’s first statement, titled “Pharma CEOs alert president von der Leyen to risk of exodus to the US,” said that “unless Europe delivers rapid, radical policy change then pharmaceutical research, development and manufacturing is increasingly likely to be directed towards the US”.
It said a survey of its members last week had shown that capital expenditure, money pumped into manufacturing centres, and R&D were the frontline risks.
According to the association, €164.8bn is planned by pharma companies in the EU between 2025 and 2029.
“Over the next three months, companies that responded estimate that a total of €16.5bn, ie 10% of the total investment plans, is at risk,” it said.
It added that the US was becoming a clear favourite for investment, with tariffs expediting that potentially, putting at risk hundreds of thousands of jobs among the 1 million directly employed in UK and EU and many more in academic and clinical settings.
“The US now leads Europe on every investor metric from availability of capital, intellectual property, speed of approval to rewards for innovation,” the EFPIA said. “Now, with the addition of tariffs, there is little incentive to invest in the EU and significant drivers to relocate to the US.”
The association presented von der Leyen with a five-point plan, including strengthening incentives to locate intellectual property in Europe and the adoption of a worldwide set of rules to make it more attractive to place innovation and research and development in Europe.
