Goaded By Tariffs, European Pharmaceutical Industry Pivots To The US

Core Viewpoint - The U.S. tariff policy and the attractiveness of the pharmaceutical market are driving European drugmakers to increase investments in the U.S., including new manufacturing facilities and stock listings [1][4][10]. Group 1: U.S. Market Dynamics - Since early 2025, European drugmakers have intensified their presence in the U.S., with AstraZeneca announcing a direct listing on the NYSE and committing $50 billion in U.S. investments by 2030 [3][4]. - The U.S. accounted for over 54.8% of global prescription medicine sales in 2024, significantly outpacing Europe, which held 22.7% [7]. - Non-U.S. drugmakers are highly exposed to tariff risks, with the EU exporting nearly €120 billion ($127 billion) worth of medicines to the U.S. in 2024, making it the largest pharmaceutical trading partner [8]. Group 2: Tariff Policy Impact - President Trump announced a 100% tariff on imports of branded and patented medicines unless manufacturers establish U.S. plants, prompting pharmaceutical companies to adapt their strategies [5][10]. - The U.S. tariff policy, combined with pressures for lower drug prices, is accelerating strategic shifts among pharmaceutical companies [10][12]. - Companies planning to build factories in the U.S. can avoid extra tariffs, influencing their decisions on manufacturing locations [10]. Group 3: Financial Considerations - The London Stock Exchange has been experiencing lower liquidity compared to the U.S. market, making U.S. listings more attractive for companies [19]. - Analysts estimate that a 15% tariff could reduce earnings by about 9% for U.S. companies and 6% for European ones, but the impact may be mitigated by outsourcing and securing multiple suppliers [23]. Group 4: Regional Differences - The UK spends only 9% of its healthcare budget on medicines, compared to 15-17% in France, Germany, and Italy, which may explain the trend of companies moving away from the UK [13]. - The European Union is revising drug rules to extend the period of protection for new medicines, which could influence market dynamics [15].