The recent trade deal between the US and the EU has placed the pharmaceutical industry under significant fiscal strain, with consequences that extend beyond short-term financials, according to GlobalData, a leading data and analytics company.

For the first time in decades, the pharmaceutical industry has been directly impacted by a geopolitical trade negotiation between the two regions, it noted.

On July 27, 2025, the US government announced a 15 percent tariff on branded pharmaceutical products imported from the EU.  

GlobalData emphasised that the deal disrupts a long-established practice of exemption of medicines from tariffs due to their importance in public health.

The company warned that this development will force pharmaceutical firms to make a trade-off between tightening their profit margins or increasing drug prices, with both paths posing a risk to patient access and payer relations.   

Further compounding the issue, the newly imposed tariffs are expected to increase costs across the entire pharmaceutical value chain, creating uncertainty in launch planning, particularly late-stage assets with EU-based manufacturing and production planned for entry into the US.

“Companies manufacturing pharmaceutical products in Europe will need to anticipate financial exposure when planning launches in the US due to the unfavourable gross to net dynamics, weakened pricing leverage with US payers, and slower commercial uptake as insurers reassess cost effectiveness due to the tariffs,” said analysts from GlobalData’s Pharma Strategic Intelligence team.

Additionally, GlobalData warned that the tariffs could place further strain on pharmaceutical R and D budgets—already under pressure—by forcing companies to divert funds to offset immediate financial impacts.

“This could hinder innovation and pipeline investment, reducing the much-needed pace of therapeutic innovation across the industry,” the company noted.

Earlier this year, the US had signaled its intent to impose tariffs on pharmaceuticals, prompting several leading drugmakers to take proactive measures to onshore manufacturing in the US to reduce exposure.

Major firms, including Johnson and Johnson and AstraZeneca, have recently made significant investments to strengthen their US manufacturing positions.

 “Ultimately, the recent US-EU trade deal has increased the level of uncertainty within the pharmaceutical industry, raising concerns on the potential of tariffs increasing past 15 percent in the future,” said the GlobalData team.

“A once shielded sector is facing a geopolitical shift, leaving the pharmaceutical industry vulnerable to global volatility. While the full impact will take time to unfold, it will be interesting to see the adoption of different strategies on how the pharmaceutical industry looks to balance innovation and ensure patient access, while managing the pressures of tariffs as they unfold into a certain reality,” they concluded.