By Elsa Ohlen

President Donald Trump has again threatened the pharmaceutical sector with high tariffs unless they move production to the U.S. Yet pharma stocks were unfazed ahead of the open Wednesday, even as import taxes risk upending the industry.

"Probably at the end of the month, and we're going to start off with a low tariff and give the pharmaceutical companies a year or so to build, and then we're going to make it a very high tariff," Trump said late Tuesday.

One key consideration for investors will be the gradual increase in proposed tariffs, which would allow drugmakers to onshore some production. Many pharma companies have already pledged large U.S. investments, including giants Novartis and Eli Lilly.

It isn't clear how tariffs on pharmaceutical products would work in practice, and if the levies would apply to where drugs' active ingredients are manufactured, where the products are finished, or where their intellectual property is held. The latter is where most of the value lies, and the IP location of companies' drugs isn't typically something they disclose. That makes it difficult to estimate the real consequences for pharmaceutical companies' bottom lines.

In addition, Trump's comments are vague. He has previously floated the idea that pharma tariffs could go as high as 200%. He vowed an imminent major tariff on pharma as early as April, and said early May that drug tariffs would be unveiled within two weeks. They have yet to materialize.

Most large U.S. drugmaker stocks were moving modestly in premarket trading Wednesday following Trump's latest comments.

Lilly, Gilead Sciences and Amgen dropped less than 0.5%, respectively.

AbbVie, Bristol Myers Squibb, Pfizer and Merck rose between 0.3% and 0.6%. Regeneron Pharmaceuticals traded flat while Johnson & Johnson rose 1.1% after reporting second-quarter earnings.

NYSE Arca Pharmaceutical Index is trading down 1.2% so far this year.

Write to Elsa Ohlen at elsa.ohlen@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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July 16, 2025 06:35 ET (10:35 GMT)

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