President Trump made it clear at his latest Cabinet meeting that imported drugs won't get a free pass anymore. Companies have roughly a year to a year and a half to build or expand U.S. plants before facing a steep 200 percent tariff on their medicine imports.
You're already seeing the reaction. Merck (NYSE:MRK), Johnson & Johnson, Eli Lilly (NYSE:LLY) and Novartis (NYSE:NVS) have quietly accelerated plans for new American manufacturing sites. They'd rather front-load the cost now than get hit with massive duties later and risk upsetting hospitals, pharmacies and patients.
This shift isn't just about politics or protectionism. Pharma executives know that setting up plants stateside means tighter control over their supply chains and shields them from unpredictable trade tensions. It's becoming a race to prove they can reliably make critical drugs right here at home.
For investors, the story to watch is capital spending and construction timelines. Quarterly reports are about to get a lot more interesting as companies disclose how much they're spending on new factoriesand how quickly those facilities come online.
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