Pharmaceutical companies are moving quickly in the face of the checkmate launched by Trump on the industry with the announcement of a 100% tariff on pharmaceutical products unless they build a plant in the country.
Thus, if on September 29, Rovi announced that it had bought a factory in the United States to produce for others for the first time outside of Spain, Pfizer announced days later a historic agreement by which it will guarantee that patients in the United States pay lower prices for their prescription medications and Bristol Myers Squibb is already beginning to sell a therapy for schizophrenia at the same price in the United Kingdom as in the United States, which contrasts with what has happened so far, since prices are higher in the United States because there companies have the freedom to set them.
Trump’s protectionist policy is not going to come free to Europeans. He rising prices of medicines in Europe It is likely as a consequence to compensate for extra costs in the United States. This is one of the conclusions that LLYC includes in its report “The impact of tariffs on the pharmaceutical industry”, advanced in this supplement.
A consequence that, at least for the moment, is not seen that way by the pharmaceutical employers. “It is very premature to talk about prices, I do not perceive that there is going to be an increase in the cost of medicines for the patient,” says Icíar Sanz, director of the international department of Farmaindustria, who emphasizes that “we must be cautious, be attentive and have a plan B. We can’t not have it. We must take advantage of the tariff breaks to reach an agreement before the summer, as has happened with generics” because there is no doubt that “the tariffs will mean making adjustments to human resources, which will affect employment”, direct and indirect, as well as “R&D because this increase in costs will mean that less will be allocated to research.”
«What we have to do is invest in innovation. That can make us gain lost competitiveness,” he adds.
And although in our case the volume of pharmaceutical exports to the country represents only 6% of the total (22% in the case of Portugal), the US market continues to be strategic for the Spanish industry.
The imposition of tariffs could affect the competitiveness of products, increase prices and reduce market share, with potential impacts on employment and the regions where production is concentrated. Thus, as Raúl Mínguez, director of the Research Service of the Spanish Chamber of Commerce, explains, “an increase in tariffs really means an increase in the price of products. That is, a barrier to the sale of European products and a drop in exports. The impact in Spain is contained, so what companies are really concerned about is how this affects the markets, since exports of goods to the US represent less than 1% of GDP for Spain, but for France it is 2% of its GDP; Italy, the 3rd; Germany is 4th, and Ireland is the country that suffers the most.
To the probable increase in the cost of medicines we must add even greater “delays” in access to innovative therapies, which already far exceed the 180 days established by the European Directive that regulates the pricing of medicines and their inclusion in the scope of national health systems. Specifically: 616 days.
And not only. The LLYC report also warns that this protectionist policy could mean an increase in the risks of shortages due to transatlantic dependence, a consequence that the Farmaindustria expert shares.
The study also warns of risk of fragmentation of the European single market if the Member States negotiate individually with Washington, weakening the European position.
Another danger is that the industry reconsiders projects in Europe, especially in the United Kingdom and other countries with low prices, while reinforcing its investments in the United States, attracted by industrial incentives and regulatory security. That is, they should transfer their investments to the United States as Trump intends.
Given this scenario It is urgent to act. «The large multinationals do not hesitate to disinvest in Europe and transfer investment to the United States. While Trump is industrializing the country, here in Europe there is talk of industrialization since covid but nothing is done. We must attract investment in real R&D,” says Carlos Parry, LLYC Healthcare leader in Europe and author of the report.
Parry emphasizes that “the risk is not acting. What is happening in the United States is not going to end. This will continue if those who have to make decisions do not go from rest mode to active mode, otherwise the biggest losers will be the patients.
The only enemy?
►It seems that the only enemy the EU has is Trump and “it is not true. There is China, which also practices dumping,” said Alicia Coronil, chief economist at Singular Bank.
«Trump – he continued – is a disruptive element that makes Europe wake up. But we must see the barriers that are hindering our industry’s competitiveness, such as the excessive barriers within the EU itself that represent a 110% tariff on our products.
Uncertainty is the new normal and “what we see in the market is that investors see the pharmaceutical sector as a refuge,” highlighted the expert, who was optimistic that the EU and the US will agree more than we think.
