Shares in European pharmaceutical companies have sunk to a four-month low, after Donald Trump repeated his threats to introduce tariffs on drug imports “within the next week or so”.
Europe’s Stoxx Health Care index slid by 2.8% on Wednesday, falling to its lowest level since mid-April, shortly after the US president’s initial “liberation day” tariff announcements.
Investors have been nervous in recent weeks as Trump has threatened to introduce sky-high levies on imported pharmaceutical products in an attempt to get companies to relocate production to the US, a pledge he reiterated on Tuesday.
“We’ll be putting a initially small tariff on pharmaceuticals, but in one year – one and a half years, maximum – it’s going to go to 150% and then it’s going to go to 250% because we want pharmaceuticals made in our country,” Trump told CNBC.
Medicines imported from the EU will face a 15% levy under the terms of the EU-US trade deal, a move that has been condemned by the European pharmaceutical industry as a “blunt instrument” that would harm patients on both sides of the Atlantic.
Bayer, the German maker of products including aspirin, the indigestion relief medicine Alka Seltzer and the allergy relief medicine Clarityn, was one of the top fallers in Europe on Wednesday. Its shares slumped by 9.9%, after the company reported a 5% drop in pre-tax profit, excluding one-off items, for the first half of the year.
Adding to investors’ jitters is the pressure being exerted on pharmaceutical companies by the White House, which is demanding that drugmakers including Pfizer, AstraZeneca and GSK cut the price of prescription drugs for Americans within the next 60 days.
Meanwhile, the US Department of Health and Human Services, led by the health secretary and longtime vaccine sceptic Robert F Kennedy Jr, announced on Tuesday it was winding down mRNA vaccine development under its biomedical research unit, calling into question the safety of a technology credited with helping end the Covid pandemic and saving millions of lives.
Kennedy said the Biomedical Advanced Research and Development Authority, which helps companies develop medical supplies to address public health threats and provided billions of dollars for vaccine development during the pandemic, was terminating 22 federal contracts for mRNA-based vaccines.
The decision is not expected to affect Britain’s two big pharmaceutical groups, AstraZeneca and GSK, which do not do much mRNA work, but Pfizer and Moderna, known for their mRNA-based Covid vaccines during the pandemic, could be hit hard. GSK said it did not have any of those contracts. AstraZeneca has one, for an RNA-based pandemic influenza vaccine in early stage development, and is exploring its options.
In London, the AstraZeneca share price lost 1.5% on Wednesday while GSK fell 1.7%. In New York, Pfizer was down 3% and Moderna was 3% lower.
Some pharmaceutical companies already appear to be responding to US calls to increase investment in domestic drugmaking facilities.
AstraZeneca, Britain’s most valuable company, announced a $50bn (£37bn) investment in the US in July and said it would soon be able to produce all of its drugs for the US market in the country.
“There’s a couple of products that are not made in the US, but we are rapidly transferring the supply to the US, because we have the capacity,” said its chief executive, Pascal Soriot.
He has praised the US for spending 0.8% of its gross domestic product on pharmaceutical innovation, while calling on Europe and the UK to increase current spending levels from 0.3% of GDP.
The chief executive of GSK, Emma Walmsley, said last week that the threat of tariffs had not dented the company’s upbeat financial outlook. She reiterated plans to invest “tens of billions of dollars in the US over the next five years”.
Switzerland’s Roche and Novartis, and the US firms Johnson & Johnson and Eli Lilly are also investing in US drug manufacturing.
Shares in another European drugmaker, Novo Nordisk, also fell on Wednesday. They lost 5.4% after the Danish company said sales growth of its injectable diabetes and obesity drugs, including Ozempic and Wegovy, had slowed sharply amid tough competition and in the face of threatened US tariffs.
Booming sales of GLP-1 drugs in recent years had turned Novo Nordisk into Europe’s most valuable company. However, it has shed close to $100bn of its market value in the past week since warning on profits and cutting its full-year sales forecast.
Danni Hewson, the head of financial analysis at the broker AJ Bell, said: “Novo Nordisk’s market value has really slimmed down in 2025. The company’s latest earnings … underscore how the company is losing ground on its rivals and the scale of the challenge facing newly appointed chief executive, Maziar Mike Doustdar.”