(1) Most of the interviewed listed pharmaceutical companies are not panicking, and some companies say that if the drug tariff is implemented, they will raise prices to protect the gross profit margin of their products;

(2) Some companies said that their products are difficult to be replaced in the United States, and pay close attention to relevant developments;

(3) Industry experts said that if drug tariffs are implemented, innovative drugs may be the least affected compared with APIs and generic drugs.

Finance Associated Press, April 9 (Reporter Lu Afeng, He Fan) Last night, U.S. President Trump announced that the United States would impose tariffs on drugs. This indicates that the categories that were originally exempted from this round of trade war may not be "spared".

The reporter of the Financial Associated Press called a number of listed companies today to understand the impact of drug tariffs on the landing, most of the interviewed companies said that "the impact is not big", and insiders of listed companies said that 890% of generic drugs in the United States rely on imports, and if the drug tariffs are landed, related products will raise prices to protect gross profit margins.

Industry experts also told the Financial Associated Press reporter that as a special commodity, due to the limited production capacity of the United States' own drugs, the existing mature supply chain cannot be replaced in a short period of time, "so this tariff plan is more of a threat, forcing American pharmaceutical companies to return." "Subdivided into specific tracks, APIs and generic drugs will be greatly affected after the drug tariffs are implemented, but innovative drugs may be the least affected.

Medicines may no longer be "reserved".

On April 8, local time, Trump delivered a speech saying that the United States would impose tariffs on drugs.

According to CCTV News, Trump said that the United States does not produce its own medicines and other health-improving products. The price paid for drugs in the United States is often many times higher than in countries where drugs are produced. Trump believes that once tariffs are imposed on drugs, pharmaceutical companies will open factories in the United States, because the United States is the "largest market."

As the main force in the U.S. pharmaceutical market, the European side reacted very quickly. According to CCTV, on the 8th local time, European pharmaceutical companies have warned at a meeting with the President of the European Commission that the US tariffs will accelerate the trend of the industry shifting from Europe to the United States. The pharmaceutical industry trade lobbying group EFPIA, which includes European pharmaceutical giants Bayer, Novartis, Novo Nordisk and others, said it had called on the EU presidency to push for "swift and fundamental action" to mitigate the "risk of an outflow" to the United States.

In fact, pharmaceuticals have been a "reserved ground" for Mr. Trump's trade war, and last week, Mr. Trump announced broad tariffs on U.S. imports that did not cover them, but he said they would face separate tariffs.

Recently, the European Commission proposed a legislative proposal for the Critical Medicines Act, which aims to incentivize the diversification of supply chains and promote the development of the EU pharmaceutical industry. According to reports, the Critical Medicines Act proposes an "industrial toolkit" to address these issues. For example, the bill stipulates that EU companies can be considered "strategic projects" if they are able to build, expand or modernize the production capacity of critical medicines in the EU. Such projects are more likely to receive financial support, as well as fast-track administrative, regulatory, and scientific support.

Some European pharmaceutical companies are sending more drugs to the United States through multiple modes of transportation due to concerns that the reciprocal tariffs announced by President Trump on April 2 may involve drugs produced in Europe, CCTV News reported. An executive at a pharmaceutical company revealed that his company is building up inventory buffers in the U.S. market to mitigate the immediate impact of potential tariffs.

Many pharmaceutical companies are not panicking

According to data from the China Chamber of Commerce for Import and Export of Medicines and Health Products, in 2024, China's export volume of pharmaceutical products will increase by 12.7% year-on-year, but the export unit price will decrease by 6.1% year-on-year, showing the dual pressure of intensified market competition and compressed profit margins. In 2024, among the US$107.964 billion in pharmaceutical product exports, the export of Western pharmaceutical products will be US$53.956 billion, accounting for nearly half. Among them, the raw materials of western medicine accounted for nearly eighty percent of the total export of western medicine, which was 42.992 billion US dollars.

Specifically, about 30% of the APIs needed for the production of major drugs (such as anticancer drugs and antibiotics) in the United States rely on imports from China, and the supply of raw materials for antibiotics such as amoxicillin is almost dominated by China; In terms of preparations, China's exports to the United States of Western medicine preparations (such as cardiovascular drugs and antineoplastic drugs) accounted for 16.55% of the total exports of preparations, with an export value of about US$1.15 billion in 2024, and in terms of innovative drugs, the related transaction volume reached US$52.2 billion in 2024.

How do domestic companies view the impact of the U.S. plan to impose tariffs on pharmaceuticals?

A reporter from the Financial Associated Press called Jianyou shares (603707. SH), the company responded to this, "We have not received specific details, according to the information released by the White House, we have also asked experts to assess, the United States plans to impose drug tariffs are not aimed at specific countries, the company's sales to the United States products are mainly shortage of drugs, some drug shortages in the United States continue to appear, market demand will not disappear, the company's products are less likely to be replaced, so the bargaining power is relatively strong." And we have made some preparations by diversifying our market layout, such as expanding sales in Europe and emerging markets. ”

Huahai Pharmaceutical(600521. SH) securities department staff to the financial Associated Press reporter called as an investor told that if the United States imposes tariffs on drugs in the future, it will definitely have an impact on the company, but it depends on the specific situation. The company's products exported to the United States are mainly preparations, most of which are exported from China, and some are produced locally in the United States, and the revenue in the United States will account for about 13% of the company's total revenue in 2023.

When asked about the countermeasures, the staff of Huahai Pharmaceutical said that because the United States is a market-oriented price competition, the company may need to make up for it from the process and other aspects, and will also assess whether there are other ways to undertake the production base in the United States. In addition, the company has been expanding the global market before, but at present, from the perspective of efficiency, the U.S. market in the preparation sector is a little larger.

Hanyu Pharmaceutical(300199. SZ) responded to a reporter from the Financial Associated Press who called as an investor, saying, "The company's current products sold to the United States are mainly liraglutide and some APIs, and we and our partners are paying close attention to relevant developments, and the relevant response needs to be studied after the specific situation of the drug tariffs imposed by the United States is clarified." The company has also been planning to expand into the European or Southeast Asian markets to reduce its dependence on the US market. ”

Companies with relatively small business in the United States further bluntly said that the impact on the company's performance is limited, among which Hengrui Pharmaceutical (600276) recently responded in investor interaction that the company's overseas sales revenue accounts for a small proportion of operating income, only 2.56% in 2024, and the impact of U.S. tariffs on the company's business is very limited. The company will continue to pay close attention to changes in the international environment, flexibly respond to the complex and changeable external environment, and ensure the long-term stable development of the company. Wantai Biotech (603392. SH) also recently directly stated in the investor interactive platform that the company's overseas revenue accounts for a relatively low proportion and the tariff adjustment has a limited impact on the company's overall operating performance.

Haoyuan Pharmaceutical(688131. SH) said that in addition to the United States, the company will also establish business warehousing centers in Europe and India in 2023, and the company is currently actively exploring the Japanese and South Korean markets. The company has reserved a certain amount of products overseas, and can ensure the timely supply of products at present.

The industry says it needs to "let the bullets fly a little longer

The securities department of Jianyou also emphasized that 890% of generic drugs in the United States rely on imports, and if drug tariffs are implemented, related products will raise prices to protect gross profit margins.

And this is also the common view of many people in the industry, Wang Heng, general manager of Beijing Best Marketing Planning Co., Ltd., told the Financial Associated Press reporter that most of the drugs in the United States rely on imports, and the most used generic drugs in the drug mainly come from India, China and other third-world countries.

Yang Tao, an executive of a biomedical listed company and a senior pharmaceutical industry expert, also told the Financial Associated Press reporter that Trump's decision to impose tariffs on drugs should be a means of "game", and there may be some workarounds in the end, such as drug tariffs that have been on the ground for a relatively long time, or to give some countries and regions tariff exemptions, etc., which need to "let the bullets fly for a while".

Yang Tao further told the Financial Associated Press reporter that China's drugs exported to the United States are mainly classified as APIs, generic drugs and innovative drugs, and in terms of APIs, the United States is very dependent on China and India, and it is very difficult for the United States to localize production in a short period of time, and it is expected that the US FDA and related associations will lobby, because the price increase of imported APIs will bring huge pressure to American pharmaceutical companies and push up the price of drugs; In terms of generic drugs, the impact may be relatively large, China's generic drug exports have been growing in recent years, and if tariffs are implemented, it will seriously affect the expansion of Chinese generic drugs in the US market; In terms of innovative drugs, due to the fact that there are many innovative drugs in China going overseas in recent years, due to the fact that most of them adopt license out and the recent emergence of the NEWCO model, which belongs to the "intellectual property royalty" in service trade, and most of the overseas enterprises cooperate with local CDMOs, and their production itself is not necessarily in China, so the impact of drug tariffs on innovative drugs may be the least.

On April 6, Baili Tianheng (688506. In response to the impact of "reciprocal tariffs", Zhu Yi, chairman of SH, said: At present, "reciprocal tariffs" are aimed at the direction of commodity trade, and have not yet targeted the direction of intellectual property rights such as licensing transactions of innovative drugs. The domestic biopharmaceutical industry's trade with the United States is dominated by the export of generic drugs, and the export value of domestic innovative drugs is relatively small, and the transaction volume of licensing is larger, and these transactions are not affected by tariffs for the time being.

According to a recent survey by BIO, a well-known U.S. biopharmaceutical organization, nearly 90% of U.S. biopharmaceutical companies rely on imported APIs to produce FDA-approved products. If tariffs are imposed on Europe, half of the companies will have to find new R&D and manufacturing partners, and if high tariffs are imposed on China, 79% of companies that have signed contracts with China will be greatly affected.

"But even if the tariffs are implemented, the demand for drugs in the United States will not decrease, the United States will not be able to replace drugs in a short period of time, and it will take a long time for the establishment of relevant industrial chains, so the trade volume may shrink, but it will not suddenly drop to zero." Wang Heng told the Financial Associated Press reporter.

Wang Heng suggested that for enterprises with a high scale of business in the United States, especially those with exclusive supply of patented drugs and key APIs, they need to pay close attention to the rapid changes in U.S. policies and actively expand markets outside the United States, such as Europe and the "Belt and Road" market. Another is to change the production model, find American CDMO companies for local production, or directly build a production base in the United States.

In recent years, the acceptance and demand for Chinese pharmaceutical products in countries along the "Belt and Road" have increased year by year, accounting for 41.4% of exports in 2024, an increase of 4 percentage points compared with 2023. A diversified market layout can greatly reduce the risk of a single market. Collection

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