Trump tariff impact on US drug makers: It is win for pharma, says Jefferies

Global brokerage Jefferies believes US President Donald Trump’s latest tariff announcement is unlikely to dent large pharmaceutical companies, terming it a “win for Pharma.”

Trump had said in a Truth Social post that his administration would impose a 100 per cent tariff on branded or patented drugs from October 1, unless companies are building manufacturing facilities in the US. 

Jefferies, however, downplayed the potential disruption. “Overall, we think this is a win for Pharma and shouldn’t have a material impact given several LC companies (e.g. MRK, BMY, LLY, PFE, ABBV, JNJ) have already announced that they’re building US manufacturing facilities,” the brokerage said in its September 26 note.

The research house highlighted that the White House is simultaneously reviewing Most Favored Nation (MFN) pilot programs proposed by HHS/CMS, but struck a cautious tone on their approval prospects. “Net net, we think this is a win for Pharma since: a) several pharma companies are already investing in US mfg +; b) CMS pilot programs may be too broad to get approved,” it said.

According to Jefferies, while there was “some nervousness heading into the Sept 29th deadline Trump imposed,” the overall trajectory points towards “a relationship that should be acceptable for industry.”

On MFN, the brokerage outlined two scenarios. First, companies may seek to offset pricing pressures by launching drugs at parity in Europe and direct-to-consumer models. Second, CMS pilot programs may not clear the regulatory hurdles. Jefferies noted: “We are skeptical MFN ultimately gets implemented through a CMMI pilot program here,” citing risks that broad pilots could limit access to medicines and have negative downstream impacts on hospitals, R&D, and the broader healthcare system.

With big pharma majors already adjusting their supply chains to US policy demands, Jefferies said that Trump’s tariff stance “may not actually have any material effect on Pharma Co’s.”