European Pharma Pushes Back on EU Trade Deal

The trade deal announced July 27 between the EU and the U.S. has drawn harsh criticism from the pharmaceutical industry. 

“Tariffs on medicines are a blunt instrument that will disrupt supply chains, impact on investment in research and development, and ultimately harm patient access to medicines on both sides of the Atlantic,” said the European Federation of Pharmaceutical Industries (EFPIA) in a July 28 statement. 

The trade organization represents drug companies across the bloc including Bayer in Germany, Novo Nordisk in Denmark, and U.S. multinationals with operations in Ireland such as Pfizer and Johnson & Johnson.

Meanwhile, it was unclear whether pharmaceuticals would even be subject to tariffs under the deal. According to the Guardian, an EU trade spokesperson said pharma imports from the U.S. to the EU would remain duty free.

But the administration of Donald Trump says differently. “As part of President Trump’s strategy to establish balanced trade, the European Union will pay the United States a tariff rate of 15%, including on autos and auto parts, pharmaceuticals, and semiconductors,” stated a Fact Sheet on the EU-U.S. deal from the White House July 28, wrongly denoting the party that pays import tariffs (U.S. importers pay tariffs on foreign goods).

The U.S. move to impose import duties on pharma is a breach of a 1995 World Trade Organization agreement that medicines and the active ingredients in them are rated at zero tariff.

The U.S. relies heavily on European-made drugs. According to the New York Times, pharmaceutical products are Europe’s No. 1 export to the U.S. Europe manufactures the active ingredients for 43% of the brand-name drugs consumed in the U.S., according to U.S. Pharmacopeia, a nonprofit that tracks the drug supply chain. No other region produces a greater share.

According to the European Union, in 2024, EU exports of medicinal and pharmaceutical products increased by 13.5% compared with 2023, reaching €313.4 billion ($361.3 billion), resulting in a trade surplus of €193.6 billion, marking a record high.

Trump has repeatedly attacked big pharma, including Pfizer, Boston Scientific and Eli Lilly, for moving production to Ireland, an EU member nation, lured by historical low-tax policies. In March, he claimed the country had looted U.S. businesses.

Read More: European Pharma Giants Threaten ‘Exodus’ to the U.S.

“If the intent is to secure pharmaceutical investment in research, development and manufacturing, rebalance trade and ensure a fairer distribution of how global pharmaceutical innovation is financed, then there are more effective means than tariffs that would help, rather than hinder, global advances in patient care and economic growth,” the EFPIA statement continued.