Last week, major pharmaceutical companies reported earnings for the first time since the inauguration, and executives weighed in on how what’s happening in Washington might affect them.
Trump’s proposed tariffs could be a giant headwind for pharma. Though Trump recently paused tariffs on Canada and Mexico, the tariff on China still stands, and he’s also floated the idea of placing a 20% tariff on the “rest of the world” (ROW) beyond those three countries. A ROW tariff would affect some countries that are major exporters of pharmaceuticals and immunological products (such as vaccines) to the US, including Germany, Japan, Ireland, India, Italy, and the UK. According to an analysis by PwC, if Trump’s proposed tariffs are enacted with no exemptions, the pharma and life sciences industry’s toll could rise from $90 million to more than $56 billion a year.
In the most recent round of earnings calls, though, executives from this industry appeared unfazed by tariffs. Merck’s CFO, Caroline Litchfield, said the company has “very low levels of manufacturing happening in China, in Mexico and Canada” and would expect “a very immaterial impact” from the most recent round of tariffs.
ROW tariffs, though, could have an outsized impact on Merck: Its cancer treatment, Keytruda, was the best-selling drug in the world in 2024, according to Statista, with a projected $27.2 billion in sales. It’s manufactured in Ireland and Singapore.
Sanofi’s CFO, Francois Roger, said it would be “difficult for us to comment” on policies that have yet to materialize, but that around 25% of its products are made in the US.
OK with RFK: On February 4, the Senate Finance Committee voted to advance the nomination of Robert F. Kennedy Jr., a vaccine skeptic, to the position of Secretary of Health and Human Services. That makes it likely he’ll win the vote of the full Senate and be confirmed. Albert Bourla, CEO of Pfizer, said he wasn’t troubled by that fact. Bourla has a personal relationship with Donald Trump going back to the development of the Covid vaccine, he said, adding that he hopes RFK will develop a “more tempered view” toward vaccines.
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Stocks of companies that produce vaccines, including Pfizer, fell following the news that RFK’s nomination had been advanced, CNBC reported.
Overall, Bourla described his stance toward the new administration as “cautiously optimistic.”
“I think there are a lot of opportunities that probably outweigh the risks that we have with the radical change that we will see from the Trump administration,” he said.
Hope for changes to the IRA: Chris Boerner, CEO of Bristol-Myers Squibb, struck a similar note: “We have a long history of working across both sides of the aisle,” he said. “We look forward to working with the new Congress as well as President Trump’s administration, including nominees like RFK.”
Boerner also suggested he’d like to see changes to the powers the Inflation Reduction Act gave the government to negotiate prices for certain drugs covered by Medicare. Bristol-Myers Squibb was one of several pharmaceutical companies that filed a lawsuit against the price-setting provisions in the IRA.
“We’ve been very clear on concerns that we have with that law,” he said. “And we see the need to have a number of fixes that will avoid some of the more damaging aspects of the law and some of the more perverse incentives.”