Vertex, Alnylam Best Positioned As Biopharma Braces For Tariff Impact, Goldman Sachs Flags Regeneron, Biogen Risks

Several exemptions exist among President Donald Trump‘s broad tariffs, which were announced on Wednesday.

The biopharma industry has historically been shielded from tariffs, including during Trump’s first term. Given its significant manufacturing presence in Europe, investors had feared global tariffs could disrupt the sector.

Morningstar reports that with the U.S. importing approximately $200 billion in pharmaceuticals in 2024, a 10% tariff could have cost the industry $20 billion, with some of the largest firms facing annual tariffs of up to $1 billion.

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Goldman Sachs expects continued volatility in the biotechnology sector (XBI and S&P 500 are down about 14% and 7% year-to-date, respectively), driven by broader economic uncertainty and unclear healthcare policy.

Analyst Salveen Richter has analyzed geographic exposure and tax rates for individual companies and sees Vertex Pharmaceuticals Incorporated VRTX and Alnylam Pharmaceuticals, Inc. ALNY in the strongest position, followed by Gilead Sciences Inc. GILD, Amgen Inc. AMGN and Biogen Inc. BIIB.

Regeneron Pharmaceuticals Inc REGN raises some concerns due to its significant presence in Ireland. If tariffs are applied, they would likely increase the cost of goods sold since companies often import ingredients or finished products into the U.S.

Analyst Richter adds that Amgen, Alnylam, Biogen, and Regeneron are the least exposed to Medicaid risk.

Goldman Sachs said Friday that it’s been hard to measure the exact impact of potential tariffs on U.S. biopharma due to limited public data on where drugs are made.

Their analysis shows limited manufacturing exposure to Canada, Mexico and China. Pharmaceuticals from Canada and Mexico are also likely exempt under the USMCA trade deal. However, some companies do rely heavily on manufacturing in the EU.

If tariffs are placed on drugs made outside the U.S. and kept in place, they could raise manufacturing costs. Companies often import ingredients or finished products before selling them in the U.S. Some manufacturers are reportedly speeding up shipments from Europe out of concern that tariffs may apply to those products, too.

Goldman Sachs is also watching for exceptions or phased rollouts, pointing to a similar eight-year grace period in the Biosecure Act.

Still, the analyst writes that biopharma companies are generally resilient due to their high profit margins and globally spread operations.

Companies that produce small-molecule drugs might handle a U.S. manufacturing shift better than those making biologics since small molecules require less complex production.

Senator Ron Wyden has raised concerns about Pfizer Inc PFE and Merck & Co Inc MRK using offshore setups to reduce U.S. taxes.

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