The European pharmaceutical industry has expressed concern that the EU-US trade deal reached at the weekend does not provide sufficient clarity and predictability for a sector that is of critical importance to the bloc.

The new agreement foresees a 15% tariff on most EU goods imported into the United States, but Washington could take further steps that would lead to higher tariffs on medicines.

The European Federation of Pharmaceutical Industries and Associations (EFPIA) said it was closely monitoring developments as “key implications for the pharmaceutical sector remain unclear.”

An EU statement on the deal said the 15% cap would also apply to any tariffs on pharmaceuticals, including under so-called “Section 232” tariffs, which are designed to protect US national security.

Currently, most EU medicines are imported into the United States duty-free – and Brussels says this will remain the case until the US decides whether to impose new tariffs under this paragraph.

Earlier this month, Donald Trump threatened to impose tariffs of up to 200% on pharmaceuticals within a year if foreign companies do not start producing more in the United States itself. Against this backdrop, leading European pharmaceutical groups such as Roche, Novartis and Sanofi announced additional investments of more than $200 billion in the US – the world’s largest market for medicines – in the spring.

Meanwhile, US pharmaceutical companies have also started investing in Ireland, attracted by the country’s low corporate tax rate. The pharmaceutical sector there employs around 50,000 people and accounts for almost half of the country’s exports, which reached €100 billion ($116 billion) last year.

EFPIA criticised the tariff policy, calling it a “crude tool”.

"Tariffs on medicines are a foolish tool that will disrupt supply chains, negatively impact investment in research and development, and ultimately harm patient access to treatment on both sides of the Atlantic," the association said. | BGNES