Trump Pressures Eli Lilly and Pfizer with Tariff Threats for Overseas Production

Multinational pharmaceutical companies face pressure to relocate production to the U.S. / Reuters

President Donald Trump has recently intensified his pressure on multinational pharmaceutical executives, warning them that they will face hefty tariffs if they do not relocate their production facilities to the United States. During a meeting at the White House, Trump discussed this issue directly with the CEOs of major pharmaceutical companies, including Eli Lilly and Pfizer. He indicated that medications produced outside the U.S. would incur tariffs of at least 25%, which he emphasized would take effect sooner than the previously stated deadline of April.

The meeting highlighted Trump's insistence that companies must expedite the transfer of their production bases to the U.S. to avoid these tariffs. This announcement has heightened concern among South Korean pharmaceutical and biotech companies, which are now wary of potential tariff impacts if they continue to export drugs manufactured in other countries to the U.S. Some domestic firms that outsource their drug production to foreign manufacturers are contemplating partnerships with U.S.-based companies as a way to circumvent these tariffs.

In addition to this tariff threat, Trump pointed out that the U.S. pays significantly more for pharmaceuticals than other countries. He noted that Robert Kennedy Jr., the Secretary of Health and Human Services, is seeking strategies to reduce drug prices. Trump has consistently criticized the disparity in drug pricing between the U.S. and other nations, advocating for changes to make medications more affordable for American citizens.

The pressure from Trump comes at a time when multinational pharmaceutical companies are looking to navigate the complexities of pricing regulations introduced during President Joe Biden’s administration. Despite efforts to persuade Trump to ease some of these regulations on drug pricing, they have faced challenges in convincing the current administration to modify policies that allow federal negotiations on drug prices.

Overall, the pharmaceutical sector is now in a precarious position, with potential tariff implications influencing corporate decisions about where to produce and distribute medications. The ongoing negotiations and pressure tactics from Trump signal a critical period for both U.S. and international pharmaceutical companies as they adapt to these emerging economic policies and regulatory changes.