94% of US biotechs expect manufacturing costs to surge if EU imports hit with tariffs: survey

Almost 90% of U.S. biotech companies rely on imported components for at least half of their FDA-approved products, making the supply of these medicines particularly vulnerable to proposed tariffs on Canada, China, and the European Union, according to results of a new survey by the Biotechnology Innovation Organization (BIO).

The survey of BIO’s membership, conducted last month, also found a “staggering” 94% of U.S. biotech companies expect “surging” manufacturing costs, if tariffs are placed on imports from the European Union (EU).

“Proposed tariffs on the EU would force 50% of companies to scramble for new research and manufacturing partners,” according to BIO. “Half of those surveyed say they would have to rework or potentially delay regulatory filings, jeopardizing the pace of innovation.”

If such tariffs were to be suddenly imposed by the Trump administration, 80% of biotech companies surveyed indicated that they would need at least 12 months to find alternative suppliers, while 44% would require more than two years — delays that BIO warned could disrupt the pipeline of breakthrough treatments, while underscoring the global integration and vulnerability of the supply chain.

“This survey demonstrates the far reaching and potentially damaging impacts of the proposed tariffs on our biotechnology industry, on biomedical research and on patients,” John Crowley, BIO’s president and CEO, said in a statement.

While BIO fully supports “strong policies and programs that incentivize the manufacture of medicines” in the U.S., Crowley said “it will take years, though, for this shift and we need to be mindful of the negative consequences of these proposed tariffs.”

At the same time, he said BIO looks forward to working with the Trump administration and Congress to “develop incentives and policies that drive private sector dollars to spur a renaissance of U.S. biotech manufacturing.”

The industry is on pins and needles in anticipation of Trump’s threatened reciprocal tariffs, which are set to begin April 2, as a global trade war looms. In a Cabinet meeting on Monday, Trump also doubled down on his threat to impose tariffs on pharmaceuticals, according to multiple media outlets.

While Trump’s tariffs on Canada, China, and Mexico are not likely to impact Pfizer, CEO Albert Bourla in an interview with CNBC last month said the company’s manufacturing operations in Europe could be negatively impacted if the Trump administration imposes import tariffs on pharmaceuticals from the EU.

Earlier this month, Bourla told the TD Cowen Annual Health Care Conference that if the Trump administration imposes tariffs on pharmaceuticals, Pfizer will transfer some of the company’s overseas manufacturing to its 13 U.S. sites.

Meanwhile, some Big Pharma companies appear to be giving in to Trump’s pressure on drugmakers to reshore manufacturing to the U.S. and reduce reliance on China and other foreign supply chains.

Late last month, Eli Lilly announced it is investing  $27 billion to build four new U.S. pharmaceutical manufacturing sites. Last week, Johnson & Johnson announced plans to invest more than $55 billion in U.S. manufacturing, research and development, and technology over the next four years.

However, AstraZeneca last week bucked the trend with its $2.5 billion investment plan for R&D, biotech and manufacturing expansion in Beijing. The new facility in Beijing BioPark will be AstraZeneca’s first vaccine manufacturing site in China.