^{Taoiseach Micheál Martin. Photo: PA}

Europe’s pharmaceutical industry is on high alert as the prospect of U.S. trade tariffs becomes increasingly likely, dashing hopes for a sector-wide exemption. President Donald Trump confirmed last week that his administration is set to impose tariffs on pharmaceutical imports, a move that has sent shockwaves through the industry.

Until now, drug manufacturers had largely avoided trade levies, but sources familiar with White House discussions suggest that tariffs on pharmaceuticals are inevitable, even if they are not announced immediately. According to a Reuters report citing four insiders, industry leaders are now scrambling to lobby for a phased implementation, which could ease the financial blow and allow companies time to shift manufacturing operations to the U.S.

Uncertainty Freezes Investments and Innovation

The looming tariffs have already created ripples in the market, impacting investment decisions and long-term strategic planning. Ester Baiget, CEO of Danish biotech firm Novonesis, highlighted these concerns during a CNBC interview on Tuesday.

“The biggest challenge isn’t just the tariffs themselves; it’s the uncertainty they create,” Baiget said. “When businesses face uncertainty, they hit pause—on innovation, on product launches, and on major investments.”

Novonesis, which generates roughly 30% of its revenue from U.S. sales, has been actively expanding its production footprint in the U.S. to mitigate potential trade disruptions. Denmark, home to pharma giants like Novo Nordisk and Bavarian Nordic, is a major hub for European biotechnology and pharmaceutical exports, making it particularly vulnerable to new trade barriers.

Novo Nordisk’s Stance on the Potential Impact

Novo Nordisk, the maker of blockbuster weight-loss and diabetes drugs like Wegovy and Ozempic, has significant exposure to the U.S. market. Yet, Chairman Helge Lund remains cautious about speculating on the potential impact of tariffs.

“We’re laser-focused on what we can control,” Lund stated at the company’s Annual General Meeting last week. While he did not disclose the exact share of Novo Nordisk’s weight-loss drug production coming from U.S.-based facilities, he emphasized the company’s strong manufacturing presence in the region.

Market analysts, however, are deeply concerned about how new tariffs could influence sales of Novo Nordisk’s treatments, particularly in comparison to U.S.-based competitor Eli Lilly, which produces Zepbound. Any price shifts due to tariffs could alter the competitive landscape of the fast-growing obesity drug market.

Investors Seek Clarity Amid Market Volatility

The pharmaceutical tariff debate is now a major talking point among investors. Emily Field, head of European pharmaceuticals research at Barclays, told CNBC on Monday that tariffs are currently the “No. 1 question on investors’ minds.”

With billions of dollars at stake, stakeholders are watching closely for policy updates. Meanwhile, Danish Minister for Industry, Business, and Financial Affairs, Morten Bødskov, assured CNBC that the government is actively engaging with pharmaceutical firms to assess the potential fallout.

“We are in close dialogue with our pharmaceutical industry and corporate leaders,” Bødskov said. “Our role is to help them understand and navigate evolving global trade dynamics. Many of these companies are world leaders, and it’s crucial that they remain competitive in the changing marketplace.”

However, he acknowledged that persuading the Trump administration to reconsider its protectionist stance—or to carve out exceptions for select industries—remains an uphill battle.

Preparing for a Rapidly Shifting Trade Landscape

For companies like Novonesis, preparation is key. “The global trade environment is evolving rapidly,” Baiget noted. “We need to be flexible, decouple where necessary, and find ways to buffer against volatility.”

As the pharmaceutical industry braces for potentially disruptive tariffs, the coming weeks will be critical in determining how companies, investors, and governments adapt to the new trade realities. With billions in pharmaceutical exports at risk, the stakes have never been higher.

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