Goaded By Tariffs, European Pharmaceutical Industry Pivots To The US

Authored by Evgenia Filimianova via The Epoch Times,

The U.S. tariff policy and its unmatched pharmaceutical market are pulling European drugmakers to invest more heavily, from new manufacturing plants to U.S. stock listings and discount pricing deals.

Since early 2025, European drugmakers have stepped up their U.S. presence. In the most recent move, the United Kingdom’s giant AstraZeneca announced on Sept. 29 a direct listing on the New York Stock Exchange, just months after pledging $50 billion of U.S. investment by 2030.

The UK-headquartered Indivior dropped its London listing in July to trade solely on Nasdaq, while Swiss giants Roche and Novartis unveiled U.S. expansion plans in April worth $23 billion and $50 billion, respectively. France’s Sanofi has likewise committed at least $20 billion in American projects through 2030.

The moves reflect both the pull of the U.S. market, which accounted for more than half of global prescription medicine sales in 2024, and the push of political signals from Washington.

On Sept. 25, President Donald Trump, after months of warning about pharmaceutical tariffs, announced a 100 percent levy on imports of branded and patented medicines from Oct. 1 unless manufacturers build plants in the United States.

“Pharmaceutical companies are very cognizant of what the White House is saying, and they’re acting accordingly,” Russ Mould, investment director at British investment platform AJ Bell, told The Epoch Times.

He said that the United States, as the world’s largest economy and the biggest pharmaceutical market, was not a place where any chief executive wanted to risk being put at a competitive disadvantage.

US Market Dwarfs Its Peers

According to data from the European Federation of Pharmaceutical Industries and Associations (EFPIA), North America represented 54.8 percent of global prescription sales in 2024, compared with 22.7 percent for Europe.

Between 2019 and 2023, two-thirds of new drug launches were made first in the United States, compared with just 16 percent across Europe’s top five markets.

That dominance has left non-U.S. drugmakers highly exposed to tariff risk. The European Union exported nearly €120 billion ($127 billion) worth of medicines to the United States in 2024, making America its largest pharmaceutical trading partner, according to the European Commission.

The United Kingdom alone shipped £7 billion ($8.5 billion) in pharmaceutical products across the Atlantic in the year to March 2025, UK government data show.

Industry analysts say the U.S. tariff policy, combined with Trump’s push for lower U.S. drug prices, are accelerating strategic shifts.

“It does look as though it is the direction of travel,” said Susannah Streeter, money and markets analyst at UK consultancy Consultable told The Epoch Times. “If companies are planning to build a factory in the United States, they will be exempt from extra tariffs. So this is concentrating minds among pharma giants about where to locate future manufacturing facilities.”

Streeter said the trend of companies shifting stock exchange listings from Europe to the United States depends largely on where their core business is located. In AstraZeneca’s case, U.S. revenues in the first quarter of 2025 made up roughly 42 percent of regional sales.

Smaller firms, Streeter said, are less likely to make such a move due to the capital required and the need for an established U.S. customer base.

“It’s quite a big undertaking. You certainly require a lot of capital to start moving entire operations, uprooting them and moving across the United States. Obviously you would need to make sure that you have a strong customer base there … So the bigger companies, it’s probably more likely that you’d see movement more quickly.”

For investors, she said the rationale behind these shifts is to avoid higher duties that could raise the cost of drugs in the United States.

“The hope is that they will avoid increased duties, which would make the drugs more expensive … so that they can ensure that their drugs get the widest possible customer base,” Streeter said.

The Push From Europe and the UK

Britain spends far less on medicines overall, just 9 percent of its healthcare budget, compared with 15–17 percent in France, Germany, and Italy, data from the Association of the British Pharmaceutical Industry (ABPI) show. Streeter said this helps explain “why you see moves away from the UK first.”

In the United Kingdom, drug companies have to hand back a large share of sales under government rebate schemes.

In 2025, firms in the main voluntary scheme will return 22.9 percent of revenues on eligible sales of newer medicines to the National Health Service, while those in the statutory scheme will pay 31.3 percent from July, averaging 23.4 percent across the year.

Rates are set to climb further to 24.3 percent in 2026 and 26 percent in 2027. By comparison, clawbacks are far lower in other European countries—about 7 percent in Germany, 9 percent in Ireland, and 5–12 percent in France, according to the Association of the British Pharmaceutical Industry.

The pressure is not limited to Britain. The European Union is also rewriting its drug rules, which determine how long companies can sell a new medicine without competition from generics. In June 2025, EU governments backed a plan to give firms at least eight years of protection, plus up to two extra years in some cases.

US Price Pressures and the Pfizer Deal

While Washington is also pressing for lower drug prices, the U.S. still offers greater rewards than Europe thanks to its size, deeper stock market liquidity, and new drug launch priority.

Following the Sept. 30 deal in which Pfizer agreed to cut Medicaid prices to match those in other developed nations, Swiss lobby Scienceindustries said other European firms may follow with similar “mini-deals.” Director General Stephan Mumenthaler told Reuters he expected announcements “one by one in the coming days and weeks.”

Both AstraZeneca and Sanofi also unveiled measures on Sept. 26 aimed at expanding affordability.

For some companies, the U.S. market also looks more attractive because of its financial depth.

“The London Stock Exchange has been suffering from lower levels of liquidity, and that has been a concern, certainly compared to the United States, where there’s been a huge amount of trading activity,” said Streeter. “There are—there are concerns about that, certainly in London.”

Tariff Uncertainty and Investment Outlook

Uncertainty remains around how U.S. tariffs will be applied, particularly for EU countries. Under a trade deal reached with the United States in July, tariffs on pharmaceuticals were capped at 15 percent.

The Trump administration formally confirmed the exemptions on Sept. 25. The following day, Irish Foreign Minister Simon Harris said Dublin would study the impact of the broader tariff announcements, but welcomed the exemptions for EU products under the agreement.

In parallel, the United States and the United Kingdom agreed under a recent trade deal to work on giving UK-made medicines and ingredients better trade terms, depending on the outcome of a U.S. review of whether certain imports threaten national security.

“I still think that there is a question mark surrounding how onerous the tariffs would actually be, particularly for European Union-based drugs companies,” Streeter said.

Meanwhile, U.S.-based financial services and investment research firm Morningstar said in a Sept. 25 report that tariffs on imported pharmaceuticals would likely have only a limited long-term effect on major drugmakers.

The firm estimated that a 15 percent tariff would reduce earnings by about 9 percent for U.S. companies and 6 percent for European ones, but said the impact would likely be eased by steps such as outsourcing production and securing multiple suppliers for key ingredients.

Analysts noted that European groups such as AstraZeneca and Novartis face higher upfront costs to expand in the United States, but could benefit from lower trade risks over time.