Andrea Alms Video:  Money In Motion 152 - Tariffs Pharma/Biotech Market Update

TRANSCRIPT: Hello, my name is Andrea Arms. I'm technology investor and financial manager and this is your Money in Motion. What is it? A tariff is a tax or duty imposed by a government on imported goods. Tariffs are essentially regressive taxes, as they take a higher proportion of income from the poor than they do from those higher up the income scale.

While they may offer short term benefits to domestic industries, economists generally view them as harmful to the overall economy, leading to higher prices, reduce trade and potentially retaliation and economic wars. Drugmaker stocks gained a temporary reprieve on Thursday, April 10th, 2025, as President Trump spared pharmaceutical products from reciprocal tariffs. But executives and analysts warned it was premature to celebrate as tariffs are still likely to come.

Trump imposed a 10% tariff on most U.S. imports, as well as much higher levied on dozens of rivals and allies alike. But temporarily exempting some goods, including pharmaceuticals, benefiting major exporters including India, Japan and Ireland. Pharma cannot just switch manufacturing to the U.S., even though most of the major companies have facilities in the country. Another key question is whether the tariffs will be based on the cost of goods, including raw materials, labor and direct factory overheads.

Other uncertainties include tariff rates, whether the fees will be phased in or dumped whole hog, and what products will they apply to. Paris could hit big branded biologics and high margin products or lower cost generics. Both options would be a big blow to the industry. Generics make up about 90% of prescriptions written in the US, while biologics and branded name drugs make the most revenue.

Just more questions, just more uncertainty because nothing is predictable in the president's economic policy. Swiss pharmaceutical companies prefer to play it safe as the stock goes on. Taiga report. Many manufacturers are stockpiling their warehouses in the US, although the sector is not yet affected. The pharmaceutical industry would soon have to brace itself to steep tariffs. Thank you. This is your money. Your money in motion.