Drugmakers comment on Trump’s pharmaceutical tariffs

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Pharma’s on edge, and for good reason. 

Drugmakers are bracing for the ripple effects of President Donald Trump’s planned tariffs on pharmaceuticals imported into the U.S. It’s still unclear what exactly those levies will seem like or once they’ll be announced. 

However the Trump administration disclosed on Monday that it had opened a so-called Section 232 investigation into how importing certain pharmaceuticals affects national security — a move widely seen as a prelude to initiating tariffs on drugs. Over the weekend, Commerce Secretary Howard Lutnick also said those duties will come “in the subsequent month or two.” 

As we kick off earnings season, we’re watching investor and analyst calls closely to see how drugmakers discuss tariffs and their potential impact on their businesses. 

Thus far, two of the most important pharmaceutical firms — Eli Lilly and Johnson & Johnson — have pushed back on Trump’s tariff threat. Those are the identical two drugmakers that announced latest multibillion-dollar investments in U.S. manufacturing over the past two months to construct goodwill with the president. 

J&J was the most recent company to comment on tariffs during its earnings call on Tuesday, though some executives appeared to have different views on the levies.  

In an interview with CNBC, the corporate’s CFO Joe Wolk said Trump “doesn’t wish to hurt anybody” together with his tariffs. He added that the administration’s probe is more likely to show most medicines shipped to the U.S. are cheaper generics, not the branded therapies sold by J&J.

“Us and our peers are more into the high science… that is where now we have a differentiation,” Wolk said. “Not only is it good for its business, however it provides America with a competitive advantage by way of leading the world in life sciences.”

Some analysts were pleased with Wolk’s similar commentary to Bloomberg on Tuesday. 

J&J management “downplayed tariff risks this morning, which we view as a very important positive development for perception concerning the threat to [the company] and the branded biopharma industry at large,” Leerink Partners analyst David Risinger said in a note on Tuesday. 

But J&J CEO Joaquin Duato echoed the warnings of health policy experts, who say that the tariffs could increase drug costs for patients and exacerbate medication shortages within the U.S. 

“There is a reason…why pharmaceutical tariffs are zero. It’s because tariffs can create disruptions in the provision chain, resulting in shortages,” Duato said during an earnings call on Tuesday. He added that favorable tax policies can be a simpler tool to spice up U.S. manufacturing capability of each drugs and medical devices.

Also on Tuesday, J&J said it expects to record a $400 million tariff expense in 2025, which reflects already-announced levies and doesn’t predict the results of pharmaceutical-specific tariffs. It’s primarily related to the corporate’s medical device products, executives said on an earnings call.

Duato’s sentiment is comparable to that of Eli Lilly CEO Dave Ricks, who warned tariffs could hamper research and development within the industry and hurt patients. He said drug prices are essentially capped in Europe and U.S., which implies higher costs from tariffs can be felt elsewhere.

There has traditionally been more pricing freedom within the U.S., but recent laws, corresponding to the Inflation Reduction Act, has introduced some price negotiation or caps for drugs covered by Medicare.

“We will not breach those agreements, so now we have to eat the fee of the tariffs and make trade-offs inside our own firms,” Ricks told BBC earlier this month, just over a month after the corporate announced $27 billion in latest domestic manufacturing. 

“Typically, that can be in reduction of staff or research and development, and I predict R&D will come first. That is a disappointing end result,” Ricks said.

We’ll proceed to follow pharma’s commentary this earnings season, so stay tuned.

Be happy to send any suggestions, suggestions, story ideas and data to Annika at annikakim.constantino@nbcuni.com.

MedTech and medical device makers are scrambling to mitigate the impact of the Trump administration’s latest tariffs on China, but already J&J has raised the alarm that the brand new levies will pose a $400 million headwind for its orthopedic and cardiac device unit.

Be happy to send any suggestions, suggestions, story ideas and data to Bertha at bertha.coombs@nbcuni.com.

The U.S. Food and Drug Administration has cleared Dexcom’s updated G7 continuous glucose monitoring system to be used by adults with every kind of diabetes, the corporate announced in a release. 

A continuous glucose monitor, or a CGM, is a small sensor that pokes through the skin and sends real-time glucose readings to an app. Glucose is a kind of sugar people get from food, and it’s our bodies’ principal energy source. 

For patients with diabetes, managing glucose is crucial for stopping and delaying serious health problems, in accordance with the Centers for Disease Control and Prevention. 

Dexcom sells a spread of CGM products, including a consumer-friendly sensor called Stelo that the corporate launched in August. But its latest FDA clearance reflects its continued push to expand market share inside its core user base: diabetes patients. 

The largest update to Dexcom’s latest G7 system is its prolonged wear time. The brand new G7 sensor will last users 15.5 days, including a 12-hour grace period that offers users a buffer to modify out their sensor. The previous generation lasted for 10.5 days, including the identical 12-hour grace period. 

Dexcom competes with other major medical device firms like Abbott and Medtronic that sell CGMs. Abbott’s CGMs could be worn for as much as 15 days, while Medtronic’s could be used for as much as 7 days, in accordance with the businesses’ web sites.  

Dexcom’s updated G7 can also be barely more accurate than its previous model, the corporate said. The brand new device has only been approved to be used in adults, nonetheless, while the previous generation could be utilized by patients ages two and older. 

“This milestone sets a brand new standard in CGM and is a testament to our continued leadership in glucose biosensing,” Jake Leach, Dexcom’s chief operating officer, said in a press release.

The updated G7 sensor can be available within the second half of the yr.  

After a rocky 2024 marred by a restructuring of its sales team and lower revenues per user, Dexcom’s stock lost about 37% of its value. Shares have fallen greater than 10% this yr, while the Nasdaq has dropped greater than 14% for a similar period. 

Analysts at Piper Sandler said Dexcom’s latest FDA approval is a “meaningful catalyst” for the corporate. Depending on how President Donald Trump’s tariffs find yourself affecting Malaysia, where Dexcom manufactures a few of its devices, the analysts said the 15-day sensor may lead to a “meaningful lift” in gross margins and revenue next yr. 

“This  product  should  allow  DXCM  to  compete  more effectively with its large competitor within the space because it closes the wear-length gap,” the analysts wrote in a note last week.

Leerink Partners analysts had a more lukewarm tackle the announcement, calling the approval an “incremental positive” for Dexcom.  

Read Dexcom’s full announcement here.  

Be happy to send any suggestions, suggestions, story ideas and data to Ashley at ashley.capoot@nbcuni.com.