EU-US trade agreement could increase up to $ 19 billion in the pharmaceutical industry costs, analysts say analysts
By Bhanvi Sati
(Reuters) – The European Union’s trade agreement with the United States could cost the pharmaceutical industry between $ 13 billion and $ 19 billion as brand medicines become a rate of 15%, analysts announced on Monday.
Additional costs could increase consumer prices unless pharmaceutical companies take action to mitigate the impact of prices, said one of the analysts.
Pharmaceutical products were historically exempt from functions. Medicines are the largest European exports to the United States by value and the EU represents approximately 60% of all pharmaceutical imports in the United States
On Sunday, European officials said that a bilateral trade agreement for a 15% rate of 15% included pharmaceutical products, with the exception of certain generic drugs, which are not subject to any rate.
The United States has conducted a national security survey in the pharmaceutical sector and the industry has prepared for separate sectoral prices. President Donald Trump said earlier this month before negotiating the bilateral agreement, that pharmaceutical prices could reach 200%.
Some Wall Street analysts said they didn’t expect additional EU prices as a result of the investigation, but others have warned that the agreement was not yet signed and that several questions have remained unanswered.
UBS analyst Matthew Weston said that he expects the details of the trade agreement to include protection measures for US EU pharmaceutical exports, especially since such measures are discussed in negotiations with the United Kingdom and Switzerland.
Analyst Diederik Stadig also said that even if prices in addition to the 15% were not expected, even after the conclusion of national security surveys, nothing is completely clear “until a trade agreement is signed”.
Stadig estimates that these samples could add $ 13 billion to industry spending without any mitigation strategy, and part of this could ultimately be borne by the consumer.
Bernstein analyst Courtney Breen puts additional expenses to $ 19 billion for industry, but she notes that companies may be able to absorb some of the costs with the measures they have implemented – such as storage of drug products and new agreers with contractual researchers.
Earlier this month, Sanofi said that he would sell a manufacturing plant in New Jersey in Thermo Fisher, where therapies of the French medicine manufacturer will continue to be manufactured. The CEO of Roche, Thomas Schinecker, said last week that the company increased its American stocks to avoid any immediate disruption of the prices.
