Portal Innovations' John Flavin: Tariffs on pharma could raise costs and delay drug access

Core Viewpoint - President Trump has threatened to impose a 100% tariff on pharmaceutical companies unless they establish manufacturing plants in the United States, with the tariffs set to take effect on October 1st [1]. Group 1: Impact on Pharmaceutical Companies - The imposition of tariffs will increase costs for pharmaceutical companies, ultimately burdening US consumers and insurance companies [2][3]. - Many early-stage biotech companies rely on outsourced manufacturing to remain cost-competitive during the clinical trial process, which could be jeopardized by tariffs [3]. - Major pharmaceutical companies like Eli Lilly and Novartis are committing to invest over $20 billion in new manufacturing plants in the US, which is seen as positive for the US economy in the long term [4]. Group 2: Short-term Concerns - The immediate concern is the disruption of supply chains and the potential delays in bringing new drugs to market due to the lack of existing manufacturing capacity in the US [5]. - There are mixed signals regarding the FDA's willingness to approve new therapies, which raises concerns among investors about the viability of investing in biotech [8][12]. Group 3: Regulatory Environment - The FDA is reportedly looking to accelerate the drug approval process, which could be favorable for investors and patients [12]. - However, there are concerns about NIH funding and the overall clarity of the regulatory environment, which complicates investment decisions [12][13]. Group 4: Global Trade Considerations - The EU has expressed expectations that the US will respect commitments on pharmaceutical tariff caps, indicating potential trade advantages for EU companies [6][7]. - Countries like Japan and Korea may be shielded from these tariffs due to existing trade agreements [14].