It’s time yet again for pharma companies to report their earnings. And while it’s sure to be a mixed bag, one thing is certain: Tariffs are going to come up.
That’s because the White House on July 28 announced 15% tariffs on pharmaceutical products imported from Europe to the US. Though this is much lower than the previously threatened 200% tariffs, analysts reportedly told Reuters the trade deal could still cost the pharma industry as much as $19 billion.
“Every dollar spent on tariffs is a dollar that cannot be invested in American manufacturing or the development of future treatments and cures for patients,” Alex Schriver, SVP of public affairs at drug industry group PhRMA, said in an emailed statement. “Placing tariffs on medicines would be counterproductive to these efforts.”
President Trump also sent letters at the end of July to top execs at 17 pharma companies like Pfizer, AbbVie, Novo Nordisk, Bristol Myers Squibb, Johnson & Johnson, and more, giving them 60 days to lower drug prices.
Here’s what some execs in Big Pharma had to say about tariffs this quarter.
Johnson & Johnson
The first half of the year has looked relatively positive for New Jersey-based J&J. The company saw $23.7 billion in overall revenue, it reported on its Q2 earnings call on July 16, with a little over $15 billion of that coming from medicine sales (cancer meds, in particular).
In its Q1 earnings, J&J predicted the impact from tariffs would be approximately $400 million. But a quarter later, it halved that to $200 million instead and predicted tariffs would only impact its medtech division, EVP of Innovative Medicine and R&D John Reed said on the call, which took place before the 15% tariffs were announced.
CEO Joaquin Duato reiterated J&J’s $55 billion investment to build out US-based manufacturing, R&D, and tech efforts, including four new facilities.
“Our goal is to be able to manufacture in the US all the medicines that are consumed in the US,” he added.
Following the call, J&J’s stock increased more than 6%.
AstraZeneca
The UK-based pharmaceutical showed a positive trajectory, with total revenue up 11% to $28 billion for H1 2025. Its stock has also continued on an upward trajectory over the last few weeks.
Group CFO and Executive Director Aradhana Sarin said in the company’s July 29 earnings call that AstraZeneca “will not be significantly impacted by tariffs” largely because the company already has “capacity” to sell its drugs in the US and it only imports “a handful of products” from Europe.
Sarin also pointed to new and expanded manufacturing efforts the company is making across the US, which it had announced a week before its Q2 call, to produce its oral GLP-1 and other weight loss drugs. The company plans to invest $50 billion through 2030 into bolstering US operations, according to a press release.
Merck
Merck has struggled in earnings so far this year. After lowering its full-year guidance during Q1, EVP and CFO Caroline Litchfield said on its July 29 Q2 earnings call that the company plans to cut $3 billion in costs by 2027. That also comes after the New Jersey-based company announced in March it would shut down a manufacturing site in Pennsylvania, impacting 163 positions.
However, the company maintained its previous estimate that tariffs would cost it roughly $200 million this year. Chairman and CEO Robert Davis said tariff impacts for the year should be “minimal,” thanks to work the company has done moving manufacturing to the US.
But Davis added he needs more clarity from the Trump administration on how tariffs are going to play out before he can comment on how they’ll affect business in 2026 and beyond. It’s not clear, for example, when the 15% pharma tariffs will go into effect, he said.
Navigate the healthcare industry
Healthcare Brew covers pharmaceutical developments, health startups, the latest tech, and how it impacts hospitals and providers to keep administrators and providers informed.
A White House official reportedly told Stat the tariffs wouldn’t go into effect until the Trump administration concludes a Section 232 investigation, initiated in April, which looks into the national security implications of importing goods, including pharmaceutical products, from other countries.
Merck’s shares fell about 6% following the earnings call.
AbbVie
Unlike Merck, AbbVie reported pretty positive Q2 earnings on July 31, raising full-year adjusted earnings per share guidance to $11.88–$12.08, up from $11.67–$11.87. Shares increased about 3.3% after the earnings call.
Though the Chicago-based drugmaker has a large presence in Ireland, Robert Michael, chairman and CEO, said AbbVie is “fairly insulated” from any effects of the EU tariffs—at least for 2025.
“Without policy details, we’re not going to speculate on the longer-term impact,” Michael added, saying it’ll be hard to know what to expect until the results of the Section 232 investigation are released.
“What I can say is that we do not expect our exposure to be outsized relative to peers,” he said.
He noted that Skyrizi, an immunology drug that’s currently the company’s best-selling product, is made in the US, and he highlighted the company’s planned $10 billion investment into expanding its US manufacturing, which includes adding four new manufacturing sites to make active pharmaceutical ingredients, peptides, and more.
Pfizer
Aug. 5 was a good day for New York-based Pfizer, which beat its Q2 earnings projections, coming in with revenue of $14.7 billion compared to its goal of $13.5 billion.
David Denton, CFO and EVP, said Pfizer has taken into account the current China, Canada, and Mexico tariffs for its full-year guidance.
When asked to comment on the letter the Trump administration sent to major pharma companies, CEO Albert Bourla said the company is in “very active discussions” with the president and other government officials. Similar to Merck, he also added that he’s “waiting for the 232 report.”
Denton expressed more optimism about the future, anticipating the first phase of Pfizer’s manufacturing strategy will result in $1.5 billion in savings by the end of 2027 and an initial impact in the latter half of this year. The company has 11 manufacturing sites in the US, which Reuters reported in March could help it dodge the impact of tariffs if it were to reshore overseas production.
Stakeholders also questioned whether the Trump administration would take issue with Pfizer’s China-made biotech, but Bourla reiterated Pfizer has exclusive global rights to its recently acquired biotech, which it plans to manufacture in the US and commercialize globally.
“But don’t take me wrong,” he added. “China is something that is very high in the radar of the political life of the US, and we need to be careful with that.”
Eli Lilly
Despite reporting better-than-expected earnings and raising its yearly outlook (to $60 billion–$62 billion, up from a previous estimate of $58 billion–$61 billion), Indiana-based Eli Lilly’s stock dropped 14% on Aug. 7 following its Q2 earnings call.
That’s because the company reported its oral GLP-1 pill orforglipron study results, which showed the drug was less effective than investors had expected, the Wall Street Journal reported.
That higher outlook estimate doesn’t take into account the recently announced 15% tariffs on pharmaceuticals entering the US, according to a press release. Eli Lilly has manufacturing sites in Ireland, Italy, Spain, France, and Germany.
“The potential effect of tariffs remains dynamic, and we will continue to update our estimate as the situation changes,” EVP and CFO Lucas Montarce said on the call. “We expect the 2025 impact of currently announced tariffs to be modest, and this has been factored into our 2025 guidance range.”
The guidance does, however, factor in tariffs already in place, such as those on goods from China, according to the release.