Pharmaceutical actions under pressure from customs and prices

The American president has demonstrated his desire to reform the American health model, which devotes 16.6% of GDP to health, compared to 9.2% on average in OECD countries. However,

Key points

• The trade agreement between the EU. For example, the United States covers pharmaceutical products, which has helped to appease fears for the sector. However, they are excluded from 39% American prices on Swiss imports. Moreover, We anticipate a separate update on pharmaceutical rates.
• The American health system is faced with a political reform, with modifications in terms of production, regulation and pricing. For example, President Trump urged large pharmaceutical companies to lower their prices. Meanwhile, aggravating the negative feeling of investors towards an already under pressure sector.
• Global capitalization global pharmaceutical companies are exchanged with a discount compared to their historical averages. Moreover, reflecting the prudence of pharmaceutical actions under pressure customs investors in the face of regulatory and political uncertainties.
• Although the health sector is not part of our favorite sectors. Meanwhile, we see a potential in certain pharmaceutical or biotechnological companies with solid pipelines, while Swiss pharmaceutical values could bounce if a certain clarity emerged in terms of tariffs.

Large global pharmaceutical companies face pressure from customs prices. Similarly, the overhaul of the health system on their largest and most profitable market, the United States. Moreover, Health is not part of our favorite sectors. However, in a context of very weak valuations and feeling, we see opportunities in certain specific areas.

The July 28 trade agreement between the European Union and the United States has given new impetus to pharmaceutical companies. Furthermore, Given the volume of the exchanges concerned, it raises part of the uncertainties for the sector. In addition, In 2024, EU pharmaceutical exports to the United States pharmaceutical actions under pressure customs totaled $ 127 billion, or 60% of the total American pharmaceutical imports. In addition, The rate of nominal customs law of 15% which will be imposed on EU exports to the United States has proven to be lower than the fears of many investors. Nevertheless, and the block declared that this rate would also apply to any future price on European pharmaceutical products. However. Furthermore, the 39% customs duties announced by President Trump on July 31, which will apply from August 7 to Swiss exports to the United States, exclude pharmaceutical products, helping to maintain vagueness on the situation, pharmaceuticals representing 38.5% of Swiss exports in terms of value.

However. Nevertheless, the pharmaceutical sector remains faced with the threat of new customs rights which could be imposed under section 232 of the American law on the expansion of trade (Trade Expansion ACT). This law allows the American president to restrict pharmaceutical actions under pressure customs imports if they are considered a threat to national security. A recent survey. carried out within the framework of this law, was opened by the Commerce Department to determine whether the pharmaceutical products responded to this definition. In May. President Trump mentioned a 25% customs tariff on pharmaceutical imports, then threatened in July to establish a “very high” rate, up to 200% in the 12 to 18 months. An announcement on this subject is expected in the coming weeks. Meanwhile. uncertainty reigns as to the implementation of certain existing taxes, for example if the new prices inflicted on the EU will apply to active ingredients, finished drugs, or both.

Let’s be clear: pharmaceutical companies have announced major investment plans to repatriate their production in the United States. and persistent disagreements on customs duties reflect an unfavorable trade balance rather than a bad will on their part.

Reshape the American pharmaceutical actions under pressure customs health system

An agreement dating from 1994 between several major economies. including the United States and China, had largely exempt from customs duties drugs as well as their ingredients. According to the European Federation of Pharmaceutical Industries (EFPIA). prices will now “disrupt supply chains, impact investments in research and development and, ultimately, harm patients to drugs on both sides of the Atlantic”.

Pharmaceutical companies are also faced with broader uncertainties that can weigh on valuations and profits growth. The American president has demonstrated his desire to reform the American health model, which devotes 16.6% of GDP to health, against 9.2% on average in OECD countries, but which produces less good health results (see Graphic 1). This situation seems untenable. suggests that the pharmaceutical industry will be faced with significant changes in the coming years in its most important and far the most profitable market.

pharmaceutical actions under pressure customs

Drugs are not the main health expenditure in the United States. According to the centers for Medicare & Medicaid Services, prescription drugs would have represented only 9% of the health expenses of the Americans in 2023. The fact remains that the reform of the system is extremely complex. In the meantime. the vagueness that reigns over these important questions and the risk for the margins of pharmaceutical laboratories should continue to weigh on stock prices.

The new US administration is trying to radically reshape the health landscape in the United States. both in terms of production and regulation and prices. At the end of July. President Trump increased pressure on the sector by writing to 17 pharmaceutical companies around the world to urge them to take immediate measures to lower the prices of medicines, with a deadline set for September 29 in order to reduce certain specific prices pharmaceutical actions under pressure customs and launch a direct sales channel to the consumer. The latter would make it possible to bypass “pharmaceutical services” managers “. namely intermediaries responsible for administering pharmaceutical services for health insurers and employers. This action follows a decree promulgated in May 2025. which wants to align the prices of medicines in the United States on the lowest rates in other developed countries, while authorizing direct sales to consumers.

While the first measure should weigh on the benefits of pharmaceutical laboratories. the second could prove positive for both the sector and for patients. The current American model, with many intermediaries between the manufacturer and the patient, absorbs a large share of health expenses. Indeed. during their telephone conferences on the results of the second quarter, several management teams in the pharmaceutical sector reported a constructive dialogue with the American administration.

The potential disturbances linked to changes within the American FDA (Food. pharmaceutical actions under pressure customs Drug Administration), which checks and approves new drugs, still raise the level of uncertainty. In this context, the deletions of jobs provided by the Trump administration threaten to slow down the drug approval process. For pharmaceutical laboratories. the marketing time from the approval of the patent – generally deposited during the drug test phase – is crucial, because any delay can start the period of commercial exclusivity, and therefore limit the potential revenues linked to a new product.

Until now. pharmaceutical laboratories have been able to react quickly to the evolution of the American landscape, in particular by announcing billions of dollars in investments in the United States (see Graphic 2). But these investments will take years to materialize. and if part of the manufacture of the active ingredients of brand medicines will be repatriated to the United States, questions remain concerning the manufacture of generic drugs, a large part pharmaceutical actions under pressure customs of which takes place in China and India. At the same time. in the absence of certainties concerning customs taxes, many generic manufacturers will seek to strengthen the resilience of their supply chains, in particular by diversifying their suppliers, which could increase their costs. However, this situation does not affect large pharmaceutical companies that only manufacture brand medicines.

What will be the impact of customs duties on Switzerland. which exports some 40% of its pharmaceutical production to the United States? Although the most recent threats exclude drugs. if the United States had to impose punitive customs duties in the sector, we see risks of decline. We revised our real growth forecast for Switzerland in 2025 to 1.1% (against 0.7% previously) in order to integrate a first semester more robust than expected. However. the announcement by President Trump of customs duties of 39% pharmaceutical actions under pressure customs and the uncertainties which result from it concerning trade between the United States and Switzerland encourages us to adopt a more conservative hypothesis at 0.9%. The longer these customs duties will remain in force. Additionally, the higher the risks for the Swiss economy, until it adapts to the shock. We believe that Berne will intensify his commercial negotiations with the Trump administration. If the country manages to negotiate a customs tariff close to 15%. the Swiss National Bank (SNB) should be able to maintain its key rate of zero. However. if the 39% customs tariff is confirmed, or if the US administration should apply sectoral prices on pharmaceuticals, the probability of a return to negative BNS would be increased.

Dark. selective opportunities

Political efforts to reduce health costs in the United States begin the feeling of investors with regard to the sector and its beneficiary prospects. In the absence pharmaceutical actions under pressure customs of clarity on sectoral prices. on the reform of the American health system, many investors should remain behind. Given these uncertainties, health is not part of our favorite sectors.

However, we note that a strong negativity is now reflected in stock prices. Global capitalization global pharmaceutical companies are currently exchanging their profits at around 12.4 times, a discount of 18% compared to their average over 10 years.

We identify specific opportunities among suppliers. as well as in pharmaceutical and biotechnological values with solid pipelines, capable of stimulating the growth of profits despite the present uncertainties. In addition. any resolution of these ambiguities for the Swiss pharmaceutical sector could also allow the Swiss Market Index to regain the lost land, after having been lagging behind other clues of the developed markets since the beginning of the year.