EU pharma sector explains duty fears

Some of the world's biggest pharmaceutical companies have sent a letter to European Commission President Ursula von der Leyen spelling out the difficult decisions they will face if the sector gets drawn into the global tariff dispute, and warning that they may be forced to move production to the United States.

French daily business newspaper Les Echos reported that signatories included AstraZeneca, Pfizer, and Eli Lilly, and that the letter called on the commission to help with measures to protect operations, and ease rules including requirements that companies must conduct multi-country trials for new drugs.

"We hope to work together in the coming weeks to ensure that these proposals become reality to the benefit of Europe's patients and economic development," the letter said.

According to statistics organization Eurostat, medical and pharmaceutical exports from the European Union to the US, its biggest market, were worth around 90 billion euros ($102.2 billion) in 2023, and supply chains across the Atlantic Ocean are closely connected, so the potential imposition of tariffs, and the resulting increase in costs, could have a huge impact.

The letter comes in the wake of a visit to the commission by representatives of lobby group the European Federation of Pharmaceutical Industries and Associations, who held talks with von der Leyen, to set out the economic concerns of their members, and their fears for the future.

A statement issued by the group at the time of that meeting said leading industry figures had "issued a stark warning to President von der Leyen that unless Europe delivers rapid, radical policy change then pharmaceutical research, development, and manufacturing is increasingly likely to be directed towards the US".

Europe's pharma sector now trails the US, it went on to say, "on every investor metric from availability of capital, intellectual property, speed of approval to rewards for innovation", and even before possible tariffs were applied, "there is little incentive to invest in the EU and significant drivers to relocate to the US".

Global trade and markets have been through a period of huge instability since the US announced its extensive program of tariffs earlier this month, and President Donald Trump has shown no sign of relenting on expansion.

"We're going to be announcing very shortly a major tariff on pharmaceuticals," he told guests at a recent National Republican Congressional Committee dinner. "And when they hear that, they will leave China. They will leave other places because they have to sell — most of their product is sold here and they're going to be opening up their plants all over the place."