As the Donald Trump administration plans up to 200% tariffs on pharmaceutical companies, Emily Field, head of European pharma research at Barclays, has said that it’s hard to predict which firm would be affected the most by these tariffs, except for Novo Nordisk A/S NVO.
Check out the current price of NVO stock here.
What Happened: Explaining that the pharmaceutical companies as a whole are “out of favor” for tariffs, Field told CNBC that it was hard to single out a company that could be the most affected by the levies.
“It’s really difficult to say because they have really complex supply chains and companies like to keep it under the wraps,” she said, adding that “Novo Nordisk has been called out just because we know a lot of active pharmaceutical ingredients for Wegovy are manufactured in Denmark, so that’s just one that investors have highlighted.”
She adds, “But that could also just be because we have a more concrete idea of how their drug flows. But for the most part, this sector is just very out of favor for tariffs.”
Talking about the European pharma companies that were planning to invest in the U.S., Field mentioned Novartis AG NVS, Roche Holdings AG RHHBY, and AstraZeneca PLC AZN.
“We have seen from a number of European companies very significant announcements about manufacturing investments in the United States. We have seen that from Novartis, Roche, and we also know that the companies are working with the administration on this ‘Most Favored Nation’ (MFN) drug pricing policy,” she said.
She also added that AstraZeneca is likely considering changing its registration to the U.S. “All of the companies based in Europe are emphasizing that they are very committed to the U.S. and manufacturing in the U.S.”
According to Field, this is all connected in some way. “It could be a combination of tariffs and drug pricing that the industry and administration can strike a deal that is favorable to both parties,” Field explained.
Why It Matters: Barclays has also cautioned that a 200% pharma tariff would “inflate production costs, compress profit margins, and risk supply chain disruptions."
“We are waiting for the results of the Section 232 investigation from the Commerce Ministry, which is supposed to come by the end of the month. Prior to Trump saying that he was going to announce 200%, I think most have been expecting 25%; however, the industry’s response is that tariffs will be negative for patients, as it could result in drug shortages,” Feild said.
These are some pharma ETFs that could be impacted as the long-awaited industry-wide tariffs would be announced “very soon,” according to Trump.
| Pharma ETFs | YTD Performance | One-Year Performance |
| VanEck Pharmaceutical ETF PPH | 0.45% | -6.90% |
| iShares US Pharmaceuticals ETF IHE | 1.01% | -3.91% |
| Invesco Pharmaceuticals ETF PJP | -1.22% | -3.19% |
| SPDR S&P Pharmaceuticals ETF XPH | -1.95% | -1.55% |
| KraneShares MSCI All China Health Care Index ETF KURE | 29.34% | 33.78% |
| First Trust Nasdaq Pharmaceuticals ETF FTXH | -3.88% | -8.36% |
| Direxion Daily Pharmaceutical & Medical PILL | -18.59% | -24.16% |
The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, ended mixed on Tuesday. The SPY was down 0.43% at $622.14, while the QQQ advanced 0.092% to $556.72, according to Benzinga Pro data.
On Wednesday, the futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were trading lower.
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