SEIZED OZEMPIC, WEGOVY AND OTHER WEIGHT LOSS DRUGS AT JFK AIRPORT’S INTERNATIONAL MAIL FACILITY.
CNBC
COPENHAGEN, Denmark — Europe’s pharmaceutical sector is bracing for the potential impact of U.S. tariffs as hopes of an industry-wide exemption by U.S. President Donald Trump fade.
The pharmaceutical industry has until now been exempt from trade levies, but Trump confirmed last week that he would soon impose tariffs on the sector.
Drugmakers at the moment are lobbying the president for a phased approach to duties on imports to the U.S., Reuters reported Tuesday, citing 4 sources accustomed to the discussions. The sources said the levies might not be announced Wednesday but were likely inevitable.
Gradual implementation of tariffs on the sector could reduce the immediate financial hit and permit corporations time to relocate their manufacturing stateside. Nevertheless, some firms have warned that the dearth of clarity is already having negative secondary effects.
“For us, what’s more vital will not be only the impact of tariffs, it is also the impact it makes available on the market,” Ester Baiget, CEO of Danish biotech firm Novonesis, told CNBC Tuesday.
“Once you bring tariffs, it drives uncertainty, and if you [are] uncertain, you pause, you pause innovation, you post launches, you pause investments,” said Baiget, whose firm derives around 30% of its sales from the U.S. but has also been boosting its manufacturing presence within the country.
Denmark is one in every of Europe’s largest pharma and biotech hubs, home to corporations including Wegovy-maker Novo Nordisk and vaccine-producer Bavarian Nordic — each of which have high exposure to the U.S.
Novo Nordisk’s chairman told CNBC last week that the corporate was not speculating ahead of Trump’s tariff announcement and was as an alternative focused on remaining flexible.
“It doesn’t make a variety of sense to take a position an excessive amount of,” Chairman Helge Lund told CNBC on the sidelines of the Danish pharmaceutical giant’s Annual General Meeting. “We’re laser-focused on what we are able to impact.”
Still, questions have been asked about how tariffs might impact U.S. sales of Novo’s hugely popular obesity and diabetes treatments — and the implications for U.S. rival and Zepbound-maker Eli Lilly. Lund wouldn’t be pressed on what share of its weight-loss drug sales derived from U.S. plants, as an alternative pointing to the firm’s “very significant” manufacturing set-up within the U.S.
‘No. 1 query on investors’ minds’
The specter of tariffs has added to uncertainty inside the investment landscape too. Talking to CNBC Monday, Emily Field, head of European pharmaceuticals research at Barclays, cited tariffs because the “No. 1 query on investors’ minds.”
Morten Bødskov, Denmark’s minister for industry, business and financial affairs, told CNBC Tuesday that he was liaising with the country’s pharmaceutical industry and corporates more broadly concerning the potential impact of tariffs on the small, export-heavy economy.
“We’re, after all, in close dialog with them,” Bødskov said. “It’s our job to bring them into discussions on the way in which the world is changing. A lot of them are world-leading corporations, so it’s our job to assist them to see the perspectives of future markets,” he added.
Nevertheless, he noted that it was unclear whether the Trump administration might be persuaded to roll back on its protectionist policies, or make allowances for certain sectors.
For corporations like Novonesis, meanwhile, Baiget said it was a matter of watching events “very closely” — and readying for motion if needed.
“There’s a variety of volatility, and there’s a variety of rapidly moving trends,” she said. “It is vital that we decouple, and we also learn the right way to possibly buffer a few of them.”
