Healthy Returns: Trump says major pharmaceutical tariffs coming ‘very shortly’

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President Donald Trump doubled down on plans to soon impose "major" tariffs on pharmaceuticals imported into the U.S. 

It comes after drugmakers breathed a temporary sigh of relief last week, when Trump exempted the sector from his big round of so-called reciprocal tariffs. 

"We're going to be announcing very shortly a major tariff on pharmaceuticals," he said on Tuesday at a dinner of the National Republican Congressional Committee, according to several news outlets. "And when they hear that, they will leave China. They will leave other places because they have to sell — most of their product is sold here and they're going to be opening up their plants all over the place."

Drug manufacturing in the U.S. has shrunk significantly in recent decades. Production of most of the so-called active ingredients in medicines have moved to China and other countries, largely due to lower costs for labor and other parts of the process, according to the Food and Drug Administration.

It's unclear what those tariffs will look like. But Trump said on board Air Force One last week that "pharma" tariffs would arrive "at a level that you haven't really seen before," according to several reports. 

Already, the pharmaceutical industry is pushing back, just weeks after some companies announced sweeping U.S. manufacturing investments to build goodwill with Trump. 

Eli Lilly CEO David Ricks warned on Friday that Trump's decision to impose broad tariffs could ultimately hurt drug research and development. 

"We can't breach those agreements, so we have to eat the cost of the tariffs and make trade-offs within our own companies," Ricks told BBC in an interview. "Typically, that will be in reduction of staff or research and development, and I predict R&D will come first. That's a disappointing outcome."

Eli Lilly has led the industry in building up its U.S. production capabilities, earmarking $50 billion to construct and upgrade new plants since 2020. Those facilities are key to manufacturing the company's blockbuster weight loss and diabetes drugs. 

But Eli Lilly also depends mainly on foreign manufacturing, most notably in Ireland, where it employs more than 3,000 people and is constructing a new $800 million facility. 

Pharmaceutical-specific tariffs would likely drive up U.S. drug prices for patients, because even if companies moved to produce those medications domestically, it would take years and cost more than producing medicines abroad, Leerink Partners analyst David Risinger said in a note last month.  

Predicting the potential impact of tariffs on pharmaceutical companies is difficult since they have vast and complex manufacturing networks with multiple steps, sometimes in different countries, TD Cowen analyst Steve Scala said in a note last week. 

But Scala said Eli Lilly, Bristol Myers Squibb and AbbVie appear better positioned than others to weather tariffs because they have more major manufacturing plants in the U.S. than internationally.

The majority of their sites responsible for producing the active ingredients in drugs are also in the U.S., he added. 

Meanwhile, Novartis and Roche "look more at risk" because they have few U.S. plants and a higher share of active ingredient sites that are international, Scala said.

Feel free to send any tips, suggestions, story ideas and data to Annika at annikakim.constantino@nbcuni.com.

While January might feel like 10 years ago (at least it does to this tired reporter), we're only one quarter into 2025. Here's what happened with digital health funding during the period, according to a new report from Rock Health. 

In the first quarter, $3 billion was invested in digital health across 122 deals, Rock Health said. Funding rose slightly, but deal count decreased, compared to the $2.7 billion invested across 133 deals during the same period last year. 

The sector nabbed $1.8 billion in funding across 118 deals in the fourth quarter of last year.

Small, early-stage startups dominated the space in the first quarter of 2025, as Seed, Series A and Series B rounds made up 83% of labeled deals, Rock Health said. 

The firm calls rounds without a public title (like Series A, for instance) "unlabeled rounds." Startups will often raise unlabeled rounds to avoid taking valuation haircuts and push through challenging markets, though they often don't stave off those tough conversations forever. 

Only five companies raised labeled Series D rounds or later in the first quarter, and three of those rounds were over $100 million. Health-care data company Innovaccer announced a $275 million raise in January, AI automation company Qventus announced a $105 million round in January and AI scribing company Abridge announced a $250 million raise in February. 

Those deals helped pull the median later-stage round size to $105 million, nearly double the $55 million median round size for this cohort from 2024. 

While the first quarter of the year was free from any major disruptions to digital health venture funding, the second quarter could bring more challenges.

Public markets have been roiling after President Donald Trump announced an aggressive, far-reaching "reciprocal" tariff policy last week, plunging the U.S. – and its trade partners – into uncertain territory. Last week, the Nasdaq Composite recorded its worst week since the onset of the Covid pandemic and entered a bear market. 

The tariffs went into effect Wednesday, though investors do not have full clarity yet: Trump has signaled he could negotiate with trading partners about potentially lowering their rates. The global trade conflict is changing by the minute, which could make some venture investors hesitant to cut big checks in the near term. 

CNBC is covering all the latest developments, and you can follow our live coverage here.

Feel free to send any tips, suggestions, story ideas and data to Ashley at ashley.capoot@nbcuni.com.