2025 Trump Tariffs on Pharmaceutical Imports
Trump announces soon-to-be tariffs on pharmaceutical imports, we dig into how much Novo Nordisk and Eli Lilly could be affected.
It's been quite the opening to 2025, and while there have been tremendous gains in research on GLP1 Receptor Agonists and widespread acceptance of how useful GLP1s are in fighting obesity, there have been large steps backwards in accessibility:
- Compounding is soon to be completely unavailable as a legal source of GLP1s like Semaglutide (Ozempic, Wegovy, Rybelsus) and Tirzepatide (Mounjaro, Zepbound)
- Providers like Hims that went all-in on compounded and other forms of Semaglutide have seen tremendous losses as they have had to pivot
- The ongoing trade war and Trump tariffs are due to impact one of the largest makers of GLP1s – Novo Nordisk.
Our focus today is that last point – the ongoing trade war – up until today there hasn't been clarity on what tariffs might be placed on companies in the GLP1 space.
Trump planning on announcing tariffs soon
It's been announced that there will soon be some clarity on pharmaceutical import tariffs:
So far, there's not much to go on other than the tariffs being "major". In the context of Tariffs that were recently announced (which go past 50% on some countries), it's unclear how severe tariffs could become for foreign (and national) pharmaceutical companies.
How much could Novo Nordisk be affected by Tariffs?
Novo Nordisk is a Danish company:
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Up until now, manufacturing of pharmaceuticals has been cheapest not in Denmark or the United States, but in other countries.
Novo Nordisk does however, have substantial investments positioned in North Carolina:
Novo Nordisk has their US headquarters based in New Jersey, with 11 other locations in the US:
So where does Novo Nordisk manufacture? While they have headquarters and R&D centers in the US, as you might expect they do not manufacture much in the US:
- North Carolina
- New Hampshire (West Lebanon)
With the reality of tariffs looming, having two manufacturing locations in the US is much better than none, but this is likely to cause a disruption to supply in the short term.
Novo Nordisk did also acquire Catalent last year:
This may have been extremely beneficial, as they acquired three manufacturing sites that are specialized in filling drugs:
- Anagni, Italy
- Brussels, Belguim
- Bloomington, Indiana
Clearly, only one of those sites would be likely immune to tariffs.
Could Eli Lilly also be affected by Tariffs?
Unlike Novo Nordisk, Eli Lilly is an American company:
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That said, manufacturing has been cheaper to perform in just about any country other than the US in the recent past, so their manufacturing capability is also spread.
So where does Eli Lilly manufacture?
- Kenosha County, Wisconsin, USA
- Limerick and Kinsale, Ireland
- Lebanon, Indiana, USA
- Research Triangle Park and Concord, North Carolina, USA
- Alzey, Germany
Eli Lilly is much better prepared to develop products in the US given their heritage and amount of manufacturing plants in the US, but it looks like they wont' be able to lean on their relatively recent investments in places like Ireland.
A return of the FDA shortage for Semaglutide and Tirzepatide?
One thing that's clear is that supply of GLP1s is under threat – where as free trade enabled cheaper importing of manufactured Semaglutide (Ozepmic, Wegovy, Rybelsus) and Tirzepatide (Mounjaro, Wegovy), the threat of tariffs means that supply will be reduced.
This brings up a interesting question – given that Semaglutide was just taken off the FDA shortage list, could tariffs be a reason for the FDA to re-declare a shortage of these drugs and re-enable compounding?
As it's become clear that negotiation with Trump and his cabinet has been relatively tit-for-tat and unpredictable, it's possible the administration could threaten this kind of action (and it might become necessary, even viewed neutrally from the point of the FDA).
This is a complicated problem, as appointees like RFK Jr. are rumored known to not particularly favor medical solutions to chronic diseases. This contrasts with Dr. Oz who is known to have over-enthusiastically pushed solutions that were not necessarily known to work (but is positive on GLP1s all together).
One important point is that since senior citizens are some of the most likely people to use GLP1s via coverage under medicare the government has actually entered price negotiations:
GLP1.Guide Staff
It's unclear how these negotiations will change with tariffs going forward, but the amount of people using GLP1s in the USA is only set to increase.
