Insulin, heart treatment and antibiotics have been freely flowing across the borders for decades, exempt from tariffs to afford drugs. However, it may change soon.
For months, President Trump has been promising to impose higher tariffs on Pharmaceuticals as part of a plan to re -order the global trade system and return the original manufacturing industry to the United States. This month, he said that pharmaceutical tariffs could come “in the very distant future”.
If they do that, this move is serious for drugs in the European Union – and wildly uncertain – the consequences will be.
Pharmaceutical products and chemicals are the first number export of the block to the United States. These include weight loss blockbuster ozempic, cancer treatment, cardiovascular drug and flu vaccine. Most name-brand drugs that make a large profit with its high value and a large number of customers in the American market.
“These are critical issues that save people,” said Lia Afrete, head of the European Consumer Organization, BUEC. “These are very important to keep in the middle of a trade war” “
European agencies can respond to various ways at Mr. Trump’s tariffs. Some pharmaceutical companies have already announced plans to increase production in the United States, which Mr. Trump wants. Others may decide to move the production there later.
Other companies appear to be present, but the tariffs can increase their prices by increasing the cost for patients. And higher prices can affect not only American customers, but also European patients. Some companies have begun to argue that Europe should create more favorable conditions for their business by breaking the rules that lower the price of the drug.
Or some middle field can play: companies can transfer their financial profits to the United States to avoid import charges, even they leave their physical factory abroad abroad abroad to avoid the ongoing expenditure and challenges to establish new supply discipline.
The group of Mrs. Afrit has already warned European officials that they certainly do not have to hit the attack on important industries with tariffs in exchange for American drugs: TIT will be very serious for European customers.
However, the pharmaceutical sector is complicated. Contracts with insurance agencies and government agencies can make prices difficult to quickly adjust branded drugs, while government regulations can turn both challenges and long -term commitments. The enthusiasm is that no one can predict the results with confidence.
“We did not get pharmaceuticals in a very long time,” said Brad W. Setsor, a economist in the foreign relationship.
Even as Mr Trump has paused his so-called “mutual” duty, in favor of the 10 percent board rate during the break, he has left some industrial-specific tariffs and made it clear that computer chips and pharmaceutical products will be next. The United States has recently launched an investigation into both sectors, which is the first step towards hitting them with tariffs.
Many industrial experts hope that new tariffs can be 25 percent in harmony with steel, aluminum and cars.
For countries at the center of the pharmaceutical industry in Europe, potential tariffs are especially worrying. This is especially true in Ireland, where Pharmaceuticals are 80 percent of all exports in the United States.
Many pharmaceutical companies have originally moved to Ireland because it provides very low corporate tax rates. However, it has also worked for its pharmaceutical industry development and provides access to a highly skilled workforce.
In recent years, the sector has grown rapidly. According to the foreign direct investment agency in Ireland, there are now more than 90 pharmaceutical companies based and many of American American drug makers have operations in the country. Last year, the Pharma industry in Ireland exports 58 billion euros or about $ 66 billion to pharmaceutical and chemical products in the United States.
Mr Trump said in March, “The Irish are smart, yes, smart guy,” Ireland Prime Minister Michelle Martin went to the White House. “You took our pharmaceutical companies and other companies,” he said. “This beautiful island of five million people has found the whole US pharmaceutical industry in its swallowing.”
Now, the tariffs can be removed from the benefits of producing there – which is the goal of Mr. Trump.
“In the United States, we no longer make our own drugs,” Mr. Trump said from the Oval Office last week, “Drug companies are in Ireland.”
Companies are already baking. According to statistics, companies are rushing to export their pharmaceuticals from Ireland and the US market.
Or Ireland is not the only country affected. Germany, Belgium, Denmark and Slovenia are also the main exporters.
“This is a huge problem for Europe,” said Penny Nas, who led a competitive program of the Thank Tank of the German Marshall Fund and has long worked on European Public Policy and Corporate issues.
European leaders are reaching both American officers and industry. In addition to the recent visit to the Irish Prime Minister at the Oval Office, the Irish Foreign Affairs Minister traveled to Washington to meet with the Secretary of Commerce.
European Union Executive Forces, Ursula von der Leon, met with the European Federation of Pharmaceutical Industries and Associations in Brussels, the Lobby Group, the largest pharmaceutical manufacturers in Europe.
The industry is earning the moment of pushing for the low-red tape-like-list items.
The European Drug Lobby Group told Mrs. von deer Leon that companies could transfer the production or investment to the United States to restrict their tariffs to Mr Trump, especially when the simple access to quick approval and capital is making America more attractive.
At least 5 members of this group, including Bayer, Fizer and Merk, have planned about $ 165 billion to invest in the European Union in the next five years. The Federation said half of it could be transferred to the United States. Or it is not alone in this prediction.
“Pharma needs more interesting conditions to produce in Europe,” Dorothy Bracman, director of Pharma Doychaland, is the largest company in Pharmaceutical Companies in Germany.
These types of warnings seem to have teeth. Some companies have begun planning to spend more in the United States; Farm Roche announced a $ 50 billion American investment plan last week, this is the latest in this national announcement.
In the commentary last week, the CEOs of Novartis and Sanophi suggested that less control to prevent bleeding is not enough. They argued that “European value control and hardness measures reduce the attraction of its markets” and the high price of the block should be paved.
Industrial officials also warned that the sector can disrupt the lines of tariff supplies, prevent the patient access and reduce research and development.
“There is a reason” that is set on the drug to zero, drug maker Johnson & Johnson chief executive Joakuin Duato called for a recent income. “This is because the customs supply can create a barrier to the chain, which causes a deficit.”
Mrs. Von deer lane emphasized the same anxiety, warning that the tariffs on the pharmaceutical sector risk are “impact on global inter -supply chains and the availability of drugs for European and US patients”. “
Pharmaceutical tariffs also have another danger for the European Union.
The block is trying to increase generic drugs, which are medically necessary but much less profitable than the name-brand products and are often made in Asia.
However, if our tariff means generic drug makers are suddenly looking for customers outside America, it can transmit lower-pills floods on Europe.
It can make the European Union more difficult to establish a domestic production base for generic, even tariffs tempt the production of name-brand drugs towards the United States.
“We think this is probably going to be the cause of investment in the United States,” says Dietoric Studig, a divisional economist at ING. “The European Commission needs to be on the ball.”
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