Shares in European pharmaceutical companies have sunk to a three-month low, after Donald Trump repeated his threats to introduce tariffs on drug imports “within the next week or so”.
Europe’s STOXX Healthcare index slid by 1.6% on Wednesday morning, falling to its lowest level since mid-April, shortly after Trump’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 during an interview 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 allergy relief medicine Clarityn, was one of the top fallers in Europe on Wednesday morning. Bayer’s shares slumped by as much as 4.9%, after the company reported a 5% drop in pretax profit before special 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.
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 (BARDA), 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.
Some pharma companies already appear to be responding to US calls to increase investment in domestic drugmaking facilities.
Britain’s most valuable company, AstraZeneca, announced a $50bn (£37bn) investment in the country in July and said it would soon be able to produce all of its drugs for the US market in the country. AstraZeneca’s chief executive, Pascal Soriot, has praised the US for spending 0.8% of gross domestic product (GDP) on pharmaceutical innovation, while calling on Europe and the UK to increase current spending levels, which represent 0.3% of GDP.
Shares in another European drugmaker, Novo Nordisk, also fell on Wednesday after the Danish company said sales growth of its injectable diabetes and obesity drugs, including Ozempic, 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 $95bn (£71.5bn) of its market value over 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.”
