Eli Lilly is preparing for potential tariffs on pharmaceuticals amid an investigation into national security threats from overseas drug manufacturing. The company’s CEO, David Ricks, met with President Trump in recent weeks to discuss the matter.
Ricks stated that while there is a threat, it is currently limited and can be absorbed within the 2025 guidance. However, he emphasized the need for close monitoring and planning to mitigate potential impacts.
The investigation focuses on national security threats rather than the global network of drug manufacturing. Ricks pointed out that many essential medicines, such as antibiotics and generics, are made overseas due to their profitability.
He suggested negotiating production in the US instead of imposing tariffs on drugs. This could help address national security concerns while minimizing disruptions to hospital care. The company has already seen significant investments from peers in response to tariff threats, with nearly $200 billion committed to manufacturing expansion in the US.
While some executives have expressed support for tariffs, Ricks believes the commitments from large-cap pharmaceutical companies should weaken the threat of tariffs on the sector. He urged “declare victory and move on” as a way forward.
Source: https://finance.yahoo.com/news/declare-victory-and-move-on-eli-lilly-ceo-on-trump-tariff-threat-160646465.html