Pharma pushback sharpens as U.S. eyes drug tariffs

Eli Lilly is the latest to sound the alarm as the United States edges closer to imposing steep tariffs on pharmaceuticals, a move that could upend decades of global trade norms in healthcare. 

In a statement released on August 14, the Indianapolis-based drugmaker underscored America’s pre-eminence in drug innovation and made clear where it stands: “We oppose tariffs on pharmaceutical products, including on the medicines we make,” the company said, warning that such measures would threaten affordability, access, and U.S. leadership in biopharma. 

Building on Lilly’s warning — and beyond

Lilly’s statement crystallized what many drugmakers had been saying quietly: tariffs on medicines threaten to unravel a system that has, until now, ensured America’s leadership in drug innovation and safeguarded patient access. Other companies and industry groups have echoed, and in some cases amplified, those concerns. 

AstraZeneca pledged to invest $50 billion in the United States by 2030. Executives framed the move as both a hedge against potential duties and a bet on U.S. innovation hubs. 

Roche and Novartis executives met with Swiss ministers earlier this month after Washington levied a 39 percent tariff on Swiss goods. While pharmaceuticals were not yet directly targeted, both companies expressed alarm over the uncertainty surrounding the ongoing Section 232 investigation. Executives warned that a breakdown in U.S.–Swiss trade cooperation could undermine transatlantic R&D partnerships that have produced some of the world’s most important therapies. 

In China, the response has been immediate and tactical. Facing tariffs of up to 125 percent on U.S. goods, Chinese pharmaceutical firms such as Vazyme Biotech and Shanghai Titan Scientific report that more than 90 percent of their clients are now exploring domestic alternatives to imported reagents and materials. At the same time, multinational suppliers like Merck and Thermo Fisher are racing to expand local production facilities to meet surging demand. The pivot highlights how tariffs could accelerate China’s long-term strategy to build a self-sufficient biotech ecosystem. 

Trade groups have amplified these corporate warnings. The Pharmaceutical Research and Manufacturers of America (PhRMA), in a formal submission to the Commerce Department, warned that broad duties would “undermine rather than strengthen national security.” PhRMA cited data from Ernst & Young projecting that a 25 percent tariff could cost the industry more than $50 billion annually. 

The Biotechnology Innovation Organization (BIO) emphasized that the bluntness of tariffs would disproportionately harm small and mid-sized companies, which lack the margins to absorb sudden cost increases. Instead, BIO has urged the administration to consider targeted tax incentives, public–private manufacturing consortia, and strategic reshoring initiatives as alternatives. 

European officials, meanwhile, have warned of a breach of trust. The European Federation of Pharmaceutical Industries and Associations (EFPIA) called the proposed tariffs a “blunt instrument” that would raise costs for patients and put decades of cross-border scientific collaboration at risk. 

The broader tariff threat

President Donald Trump has signaled an escalating approach: starting with a “small tariff,” he has floated hikes to 150 percent within 18 months and eventually to 250 percent, all in the name of bolstering domestic pharmaceutical production. 

What it means for patients and innovation

Economists and patient advocates caution that tariffs are unlikely to reduce U.S. drug prices, which are largely shaped by R&D costs and patent protections rather than import duties. Instead, high tariffs could threaten the supply of low-margin generics and older therapies. 

For Lilly and others, the point is less about avoiding costs and more about preserving a model of global cooperation that has long underpinned biopharmaceutical innovation. Where Lilly offered a clear statement of opposition, other companies and associations are backing that stance with billions of dollars in investment shifts, emergency diplomacy, and policy advocacy—signaling just how disruptive the tariff threat has already become.