Are importers front-running pharma tariffs?

Pharmaceutical products rushed into US ports in the first two months of this year as the threat of tariffs on the industry looms.

Pharmaceutical products imported to the US in January and February reached $37 billion, compared to $31 billion during the same period last year. Ireland, the largest exporter of pharmaceuticals to the US by value, saw its exports reach all-time highs at the start of the year as well.

Pharmaceutical products are normally excluded from tariffs due to a World Trade Organization agreement that the US signed in 1994. The industry was spared from the initial “Liberation Day” tariff announcement despite President Trump saying in his speech that drugmakers were a target. But Trump hasn’t let up on the threats and the Commerce Department filed a notice to the Federal Register on Monday saying it was investigating tariffs on pharmaceuticals.

Ireland and other European countries primarily export research-based name-brand drugs. Eli Lilly, Pfizer, and Johnson & Johnson manufacture in Ireland and Novo Nordisk makes some of its most popular drugs, like Ozempic, in Denmark.

While European pharmaceuticals have a higher dollar value, generic drugs, which are predominantly made in India and China, account for 90% of prescriptions in the US. Companies that make those drugs operate on slimmer margins and have said their only option in the event of tariffs would be to raise prices.