Page 170 - CW E-Magazine (29-4-2025)

Special Report Special Report

Unpacking the latest on pharma, trade & tariffs: Representative. Goods exports totalled industrial and trade policies that approval to rewards for innovation,”
said EFPIA in its April 8, 2025, state-
$370.2-bn; goods imports totalled improve the EU’s competitiveness.
What may be next? $605.8-bn. The US goods trade defi cit EU innovator drug companies speak out ment. “In addition to the uncertainty
with the EU was $235.6-bn in 2024.
created by the threat of tariffs, there is
lobal volatility on the trade ing partner by examining the following PATRICIA VAN ARNUM On April 8, 2025, the European little incentive to invest in the EU and
front continued as the US put on a country-by-country basis: Editorial Director, (DCAT) The US is the EU’s largest trading Federation of Pharmaceutical Industries signifi cant drivers to relocate to the US.”
Ga 90-day pause on implement-  Tariffs imposed on US products; partner for medicinal and pharmaceuti- and Associations (EFPIA), representing
ing its plan for reciprocal tariffs on a  Unfair, discriminatory, or extraterri- on market access or any structural cal products, according to information innovator drug companies in Europe, EFPIA is calling on EU policymakers
country-by-country basis, but uncer- torial taxes imposed by US trading impediment to fair competition with from Eurostat, the EU’s statistical and raised concerns of EU industrial policy, to take “immediate action” in four main
tainty remains, particularly for certain partners on US businesses, workers, the market economy of the US. information body. In 2023, EU ex- along with trade policy, further shifting areas:
trading partners, notably China. What and consumers, including a value- ports of medicinal and pharmaceutical capital and R&D investments from the  Achieving a competitive EU market
is the impact on the pharma industry added tax, referring to a type of Impact on the bio/pharma industry products to countries outside the EU EU to the US. that attracts, values and rewards inno-
and what may in store? consumption tax that is levied on What remains uncertain for the bio/ reached €277-bn ($290-bn), with the vation in line with other economies
the incremental increase in value of pharmaceutical industry is how tariffs US accounting for approximately one- “…CEOs of the research-based at the forefront of patient care;
Global trade policy remains in fl ux a good or service at each stage of will be imposed globally and on third or €92-bn ($96-bn). pharmaceutical industry issued a stark  Strengthening, rather than weaken-
Global trade policy, in the form the supply chain; country-by-country basis and specifi - warning to President von der Leyen ing, Europe’s intellectual property
of tariffs, remains a large unknown as  Costs to US businesses, workers, cally to the bio/pharmaceutical indus- Both major segments of the industry – [Ursula von der Leyen, President of the provisions;
evolving US trade policy took another and consumers arising from non- try. On April 8, 2025, news reports of innovator drug companies and generics/ European Commission] unless Europe  Adopting a world leading regula-
turn on April 8, 2025 with the Trump tariff barriers or measures and un- comments made by President Donald biosimilars producers – issued statements delivers rapid, radical policy change, tory framework conducive to inno-
Administration announcing that it fair or harmful acts, policies, or Trump signalled that the Administra- on April 8, 2025 (prior to the 90-day then pharmaceutical research, develop- vation; and
would place a 90-day pause on the practices, including subsidies, and tion is considering specifi c tariffs on pause on reciprocal tariffs announced on ment and manufacturing is increasingly  Ensuring policy coherence across
implementation of so-called “recipro- burdensome regulatory require- pharmaceutical imports to the US as a April 9, 2025) to provide their positions likely to be directed towards the US,” environmental and chemical legis-
cal tariffs” on US trading partners that ments on US businesses operating means to incentivize US domestic pharma- with respect to the EU’s response on the said the EFPIA in an April 8, 2025, lation to secure a resilient manufac-
had been scheduled to take effect on in other countries; ceutical manufacturing. Key questions tariff situation and the impact on the bio/ statement. turing and supply chain of medi-
April 9, 2025. On April 2, 2025, the  Policies and practices that cause ex- that arise are at what level would such pharma industry in Europe. cines in Europe.
Trump Administration laid out its plan change rates to deviate from their tariffs apply (fi nished drug products, EFPIA underscored its position
that imposed an individualized recipro- market value, wage suppression, active pharmaceutical ingredients) and Their comments followed EU based on a survey of EFPIA member “Where innovation happens mat-
cal higher tariff on the countries with and other policies that reduce US what other tariffs may be placed on member states voting in favour on companies conducted in early April ters, it matters to patients, to healthcare
which the US has the largest trade defi - competitiveness; and other inputs used in the manufacture of April 8, 2025, of the European Com- 2025, in which 18 large and medium- systems, to the European economy and
cits, while continuing an original 10%  Other practice that, in the judgment pharmaceuticals either specifi cally or mission’s proposal to introduce trade sized innovator companies responded, security,” said EFPIA in its statement.
tariff baseline on all countries, with the of the United States Trade Repre- part of overall US trade policy. countermeasures, which would have over the level of planned capital expen- “Europe needs to make a serious com-
exception of China. China, which had sentative, in consultation with the gone into effect on April 15, 2025, for ditures and R&D investments in the EU mitment to invest in a world class pharma-
issued trade countermeasures to the US Secretary of the Treasury, the EU-US trade policy takes another turn a range of goods against the US, which by the bio/pharmaceutical that would ceutical ecosystem, or at best, risk
reciprocal tariffs imposed on it, is sub- US Secretary of Commerce, and The US goods trade (exports plus the EU said was in response to an ear- be at risk. The survey identifi ed that being reduced to a consumer of other
ject to a 125% import tax announced the Senior Counsellor to the Presi- imports) with the European Union (EU) lier (March 2025) decision by the US as much as 85% of capital expenditure region’s innovation.”
by the White House on April 9, 2025, dent for Trade and Manufactur- totalled $975.9-bn in 2024, according to impose tariffs on imports of steel investments of approximately €50.6-bn
plus an additional 20% fentanyl-related ing, imposes any unfair limitation to data from the Offi ce of the US Trade and aluminium from the EU. The EU ($57.1-bn) and as much as 50% of R&D EU generics and biosimilar producers
tariff already imposed in February and had also signalled that it would seek expenditure of approximately €52.6-bn speak out
March on China, effectively creating a other trade countermeasures against ($59.2-bn) were potentially at risk out Medicines for Europe, which repre-
145% tariffs on imports to the US from the reciprocal tariffs imposed against of a current combined total of €164.8-bn sents generics and biosimilar producers
China. the EU. With the 90-day pause for reci- ($185.6-bn) in investments planned in Europe, reported on April 8, 2025
procal tariffs by the US on the EU and for the period 2025-2029 in the EU-27 that it and its delegation met with Ursula
The Trump Administration fi rst other countries now in effect, nego- territory. Over the next three months, Von der Leyen, President of European
laid out is plan for imposing reciprocal tiations continue among all parties. companies that responded to the sur- Commission, for a strategic dialogue
tariffs in February 2025 as a means to How the trade and tariff situation bet- vey estimate that a total of €16.5-bn on how the European Commission can
counter non-reciprocal trading arrange- ween the EU-US will play out is still ($18.6-bn) – approximately 10% of the best support the pharmaceutical sector
ments with trading partners and as a to be seen, but the bio/pharmaceutical total investment plans – is at risk. overall and amidst the changing trade
way to improve US competitiveness, industry is emphasizing the harmful picture.
including in manufacturing. It deter- impact that escalating trade tensions “The US now leads Europe on
mined the equivalent of a reciprocal could have on the industry and the every investor metric from availability “Tariffs are a regressive and
tariff with respect to each foreign trad- need for the EU to continue to purse of capital, intellectual property, speed of counterproductive and would disrupt

170 Chemical Weekly April 29, 2025 Chemical Weekly April 29, 2025 171

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