Listen to this article

The basics:

• Trump plans 100% tariff on branded drugs imported to U.S.
• BioNJ, HINJ warn of risks to patients, jobs & innovation
• Major pharma firms investing billions in U.S. production sites
• Industry groups urge exemptions to protect drug supply chains

New Jersey’s life sciences industry is speaking out against President Donald Trump‘s plan to impose a 100% tariff on branded or patented pharmaceutical products imported into the U.S. starting Oct. 1.

In a Sept. 25 social media post announcing the policy, the president also said drugmakers could escape the penalties if they have a U.S.-based manufacturing plant that is either under construction or had a groundbreaking.

It’s unclear how many companies will meet qualifications for exemptions under that rule. However in recent months, many pharmaceutical companies have pledged billions in investment into domestic production sites thanks to pressure from the Trump administration.

Last week’s announcement reportedly does not include generic drugs, which account for the majority of American prescriptions, CNN noted. Additionally, medications made in the European Union are not covered by the new tariffs but are subject to a 15% tariff imposed by Trump in July.

That policy came as the president rolled out a plan to “get Americans the best prices in the world for prescription drugs.” The push involved asking major drugmakers to match low prices they offer elsewhere in the world.

‘Deeply concerned’ in NJ

BioNJ President and CEO Debbie Hart said her organization “is deeply concerned” about the White House’s announcement.

“These proposed tariffs have the potential to increase manufacturing costs, disrupt supply chains, slow research and development timelines and ultimately hurt patient access to essential medicines at a time when affordability remains a major concern in the U.S. health care system,” she commented.

“As the organization in New Jersey that represents the full continuum of biopharmaceutical companies including the most frangible early-stage companies, BioNJ urges all policymakers to do all within their power to protect innovation and the investments that all of our companies are making in innovation and patients.”

Chrissy Buteas, president and CEO of the HealthCare Institute of New Jersey, said in a statement, “New Jersey’s life sciences share the goal of strengthening America’s national security and manufacturing supply chain while remaining the global leader in medical innovation.

“We will continue working with all stakeholders to strike the right balance of urgency in the immediate term, but we must ensure we don’t unintentionally jeopardize patients, medical advances or New Jersey jobs as we do so,” Buteas continued.

National groups share pleas

Trade group Pharmaceutical Research and Manufacturers of America (PhRMA) told CNN, “Companies continue to announce hundreds of billions in new US investments thanks to President Trump’s pro-growth tax and regulatory policies. Tariffs risk those plans because every dollar spent on tariffs is a dollar that cannot be invested in American manufacturing or the development of future treatments and cures.”

[E]very dollar spent on tariffs is a dollar that cannot be invested in American manufacturing or the development of future treatments and cures.
– PhRMA, to CNN

The American Hospital Association urged the administration to maintain tariff exemptions. It emphasized in particular products already experiencing shortages as well as for countries that produce a significant portion of the U.S. pharmaceuticals and pharmaceutical ingredients market supply.

“The lives of patients often depend on the ready availability of drugs to respond to emergent conditions like heart attacks and infections, and other critical illnesses like cancer and organ failure,” the group said. “The supply chain for pharmaceutical products is highly complex and requires hospitals to draw on both domestic and international sources. For many patients, even a temporary disruption in their access to these needed medications could put them at significant risk.”

Ramping up domestic operations

Trump’s sweeping tariff announcement in April excluded the pharmaceutical industry. However, he has repeatedly threatened sector-specific duties and cited drugmakers’ reliance on production sites around the world to supply the U.S. market.

The president has said he hopes the duties will pressure drug manufacturers to ramp up domestic operations and strengthen the supply chain for essential medicines.

Amid renewed threats of import tariffs on pharmaceuticals from the White House, a growing number of New Jersey pharma giants have announced multiyear investments aimed at strengthening their U.S. manufacturing footprints.

The list so far includes:

• $20 billion from Sanofi in Morristown
• $8 billion from Merck & Co. in Rahway
• $23 billion from Novartis in East Hanover
• $55 billion from Johnson & Johnson in East Brunswick

‘Myriad of questions’

Novartis told NBC News it expects little to no impact from the administration’s newly announced duties.

In a statement, the company said, “We are working to ensure that all major Novartis medicines for U.S. patients are manufactured in the U.S.”

The company pointed to multiple construction projects in Kentucky, Indiana, New Jersey and California.

Commenting on the situation, KPMG U.S. Life Sciences Leader Kristin Pothier said, “It’s a fork in the road moment for the pharmaceutical sector as they find themselves with more questions than answers. For example, how big does a manufacturing plant have to be? Does a pilot plant count? These are just some of the myriad of questions leaders are grappling with as they assess what the ripple effects and implications of new tariffs could be across their operations, margin performance and pricing strategy.”