Key facts
- President Donald Trump threatened generic drugmakers with tariffs if they do not manufacture medicines domestically.
- Tariffs of 100% are threatened starting August 2028, increasing to 200% the following year.
- Sandoz will continue discussions with U.S. policymakers on domestic manufacturing goals.
- Sandoz plans to close its sole U.S. manufacturing facility in New York by the end of 2026.
- An analyst suggested that reshoring production could lead to higher generic drug prices in the U.S.
Swiss generic drugmaker Sandoz stated it would continue discussions with U.S. policymakers following a threat from President Donald Trump to impose steep tariffs on medicines manufactured overseas.
Trump posted on X Tuesday that generic drugmakers must manufacture medicines for the U.S. locally or face a 100% tariff beginning in August 2028, escalating to 200% the following year. According to the U.S. Food and Drug Administration, over 90% of medicines sold in the U.S. are generics.
Sandoz affirmed its commitment to improving affordability and access to medicines in the United States and will engage in discussions with policymakers to achieve this goal. The company announced earlier in 2024 that it would close its only U.S. manufacturing site in Long Island, New York, around the end of 2026, though it is too early to assess implications for future operations or investment decisions.
Analyst Stefan Schneider of Vontobel suggested that the U.S. government's objective is to reverse the trend of generic drug production moving to lower-cost countries, but acknowledged that reshoring manufacturing could increase prices for generics in the U.S. He noted that while new rules would primarily impact China and India, they would also affect Sandoz, given that approximately 22% of its sales are in North America with minimal production there. Sandoz shares experienced a decline of around 3% after the market opened on Wednesday.