A 15% import tariff on pharmaceutical goods from the European Union to the US is going to have a lesser impact on the pharmaceutical industry than Wall Street feared.
Big pharmaceutical stocks like Pfizer (PFE), Eli Lilly (LLY), and Johnson & Johnson (JNJ) rose slightly, by about 1%, in trading Thursday after the trade deal was announced.
“The two regions have established a 15% tariff cap on imported drugs from EU to the US. This is being viewed by most as both manageable and below the 20%+ rate many expected,” wrote Mizuho’s healthcare expert Jared Holz in a note to clients Thursday.
The deal outlined by the US and EU has multiple parts that impact the pharmaceutical industry.
The first is levying either the 15% tariff or the Most Favored Nation (MFN) pricing, whichever is higher, on branded pharma drugs manufactured in the EU. This puts more emphasis on President Trump’s efforts to equalize US drug costs to the lower prices seen in the EU and other developed nations and also impacts a smaller portion of products, as pharma executives have emphasized that most of the branded drugs sold in the US are made in the US.
EU Commissioner for Trade and Economic Security, Interinstitutional relations and Transparency Maros Sefcovic looks on during a press conference on the EU-US tariffs deal at the European Commission in Brussels, on August 21, 2025. (Photo by Nicolas TUCAT / AFP) (Photo by NICOLAS TUCAT/AFP via Getty Images) · NICOLAS TUCAT via Getty Images
“The United States commits to apply the higher of either the US MFN tariff rate or a tariff rate of 15 percent, comprised of the MFN tariff and a reciprocal tariff, on originating goods of the European Union,” according to the White House statement.
The second part of the deal is that, as of Sept. 1, the US will enforce MFN pricing on generics and “chemical precursors.” The latter refers to active pharmaceutical ingredients, which are the key chemical compounds in any drug. They are cheaper to mass-produce overseas, largely in Asia or Ireland.
Experts say that prices for generics, which account for a majority of prescriptions filled in the US, are already low.
“The administration is, for the time being, focusing Most Favored Nations pricing on generic products — hoping to peg US prices to that of other countries. Given the already lower cost of generic medicines and net price paid domestically, see the financial ramifications here as more limited than not. Have to look deeper at what precise drugs will be subject to this regulation but for now, not a strategy we see as stifling the industry/major players,” Mizuho’s Holz said.
The deal also left wiggle room for additional items: “The United States and the European Union agree to consider other sectors and products that are important for their economies and value chains for inclusion in the list of products for which only the MFN tariffs would apply,” according to the White House statement.
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