European pharmaceutical stocks experienced a notable decline on September 26, 2025, following U.S. President Donald Trump's announcement of a sweeping 100% tariff on branded and patented pharmaceutical products originating from Europe. The tariffs are slated to take effect on October 1, 2025, with the stated aim of compelling pharmaceutical companies to establish or expand manufacturing facilities within the United States. Companies that have already initiated construction of U.S. facilities are eligible for an exemption, serving as a direct incentive for domestic production.
The immediate market reaction saw shares of major European pharmaceutical firms, including Novo Nordisk, Roche, Novartis, and AstraZeneca, dip by approximately 1.8% to 2% on the Tradegate platform. This downturn underscores the significant financial implications of the U.S. policy shift for these global entities, which rely heavily on the U.S. market for revenue. In 2024, the European Union was the primary supplier of pharmaceutical imports to the U.S., accounting for approximately 60% of the total. The total value of U.S. pharmaceutical imports in 2024 was approximately $212 billion.
This tariff imposition is part of a broader strategy by the U.S. administration to bolster domestic manufacturing and reduce reliance on foreign supply chains. Historically, many pharmaceutical manufacturers have shifted operations overseas to leverage favorable tax policies. The new tariffs could impact an estimated $220 billion of U.S. pharmaceutical imports.
In response to the looming tariffs and to mitigate potential costs, several leading pharmaceutical companies have already announced substantial investments in U.S. manufacturing facilities. AstraZeneca, Roche, Eli Lilly, Johnson & Johnson, Novartis, and Sanofi have collectively unveiled multi-billion-dollar investment plans in the U.S. Eli Lilly, in particular, has committed over $50 billion in U.S. capital expansion since 2020, marking one of the largest pharmaceutical manufacturing investments in U.S. history.
While the U.S. administration frames these tariffs as a measure to encourage domestic industry and enhance national security, concerns have been raised regarding the potential impact on drug prices and patient access. The European Commission has stated that a previously agreed-upon trade deal with the U.S. caps tariffs on EU exports at 15%, asserting that the new 100% tariff will not apply to European pharmaceutical products. This assertion introduces a layer of complexity and uncertainty as the market navigates the full implications of the U.S. policy. The industry is now focused on strategic adjustments and engagement with U.S. authorities to understand the precise application of these measures and their long-term effects on global pharmaceutical production and supply chains.