- 06 May 2025
- ICICIdirect Research
News: Donald Trump has signed an executive order that will incentivize manufacturing prescription drugs in the US locally, this is in lieu of potential import tariffs on pharma products going ahead. This order also mentions speeding up of local manufacturing facilities approval process from the USFDA and raising inspection fees for foreign manufacturing plants.The US imported US$ 203 billion in pharmaceutical products in 2023 alone, with 73% coming from Europe, primarily Ireland, Germany and Switzerland.
View: This order mainly pertains to Innovator Drugs as the destinations mentioned are sources of Innovator Drugs. Imposition of a number same for Generics in toto looks unlikely as this can significantly increase the cost of the Generics. We expect further rounds of negotiations for Generics in this regard. That said, the signing of the order and the impending tariff announcement on Pharma may weigh on some stocks in the near future.
Impact: Neutral