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US President Donald Trump has placed 15% tariffs on branded pharmaceuticals, while exempting generics. Image credit: Racamani \/ ShutterStock.com<\/p>\n
Following Trump\u2019s decision to implement 15% import tariffs <\/a>on goods from the EU, the US President has signed an agreement with the union, laying out tax rates for generic and branded pharmaceuticals.<\/p>\n Through the clarification of the EU-US trade deal, generic pharmaceuticals \u2013 which make up 90% of US prescriptions according to the Association of Accessible Medicines \u2013 will now be subject to the new US Most Favoured Nation (MFN) tariff rate. This special tax will also apply to generic active pharmaceutical ingredients (APIs).<\/p>\n \n\t\t\t\t\t\tCombine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.\n\t\t\t\t\t<\/p>\n The MFN rate is described as a standardised, non-discriminatory tariff that is applied to all trading partners of a country under the World Trade Organisation (WTO) unless a lower rate is agreed upon.<\/p>\n Though the Trump Administration has not yet disclosed the exact MFN rate, a EU-US trade deal Q&A from the European Commission (EC) states that MFN-designated tariffs will be \u201ceffectively zero or close to zero\u201d once they come into effect on 1 September 2025.<\/p>\n However, branded pharmaceuticals will not be exempt, with a blanket rate of 15% being placed on them and their constituents \u2013 despite the EU producing 43% of the APIs used in US-prescribed branded pharmaceutical products, according to the US Pharmacopoeia.<\/p>\n Though branded products will be subject to the full tariff rate, the Trump Administration has vowed to cap tariffs at 15%, providing a little more certainty for European-based pharma and drug manufacturing companies.<\/p>\n EU tariff uncertainty addressed, but questions remain<\/p>\n Though GlobalData\u2019s analysts predict that the US-EU trade deal could lose the pharmaceutical industry anywhere between $13bn and $19bn, the 15% rate will be welcome compared to the 200% tariffs Trump previously threatened to implement on drugs entering the US.<\/p>\n GlobalData analyst, Eoin Ryan believes that EU member states are likely to continue to pressure EC trade negotiators around the pharmaceutical sector. Ryan said : \u201cEU trade commissioner Maros Sefcovic has said that while the agreement \u201clocked in\u201d significant exemptions, EU negotiators will push for more products to escape the 15% tariff rate. More likely than not, these key demands will go unanswered in the current geopolitical environment.\u201d<\/p>\n The European Federation of Pharmaceutical Industries and Associations (EFPIA) has also voiced its concerns, with director general Nathalie Moll, noting that she was \u201cconcerned for the future of patients and the pharmaceutical sector in Europe\u201d in a 21 August statement.<\/p>\n Additionally, Moll said that the deal could impact Europe\u2019s ability to collaborate on new treatment development, as \u201cbillions of Euros will be diverted away from medical research\u201d.<\/p>\n Moving forward, the EFPIA has called for exemptions on innovative medicines in a bid to protect patients and maintain the EU pharma industry\u2019s standing in the market.<\/p>\n Liam Maddison, value & access consultant at Syneos Health, echoed this sentiment in a LinkedIn post, stating that tariffs present \u201creal risks of patient cost increases, supply chain disruption and shifting global price dynamics\u201d.<\/p>\n \u201cIn this new environment, companies can\u2019t control tariff decisions, but they can control how prepared they are when these shifts spill over into market access discussions,\u201d Maddison added.<\/p>\n Navigate the shifting tariff landscape with real-time data and market-leading analysis.<\/p>\n Request a free demo for GlobalData\u2019s Strategic Intelligence here<\/a>.<\/strong><\/p>\n \n Sign up for our daily news round-up! Pharmaceutical Technology Excellence Awards – The Benefits of Entering<\/p>\n Gain the recognition you deserve! The Pharmaceutical Technology Excellence Awards<\/strong><\/a> celebrate innovation, leadership, and impact. By entering, you showcase your achievements, elevate your industry profile, and position yourself among top leaders driving pharmaceutical advancements. Don\u2019t miss your chance to stand out\u2014submit your entry today!<\/p>\n![\"\"\/](\"https:\/\/www.pharmaceutical-technology.com\/wp-content\/themes\/goodlife-wp-B2B\/assets\/images\/GMS-logo.svg\"){kind=logo}
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