Bio/Pharma's Tariff Response: Key Insights from Industry Survey Results

Bio/Pharma's Tariff Response: Key Insights from Industry Survey Results

Trump-era tariffs have been all over the news of late, which led us to speak with international trade expert Jason Waite, of Alston & Bird, in late July. Jason had so much to say, we cut the interview into three parts. Check out Part 1, Part 2, and Part 3 for some great insights. We also spoke with Dave Miller, PhD, at AustionPx about the impact of these tariffs on reshoring and the associated unepexcted benefits. We also asked experts who we interviewed as part of the BIO 2025 conference in Boston about lasting impacts of recent changes in US government policy. But we wanted to hear from you, our readers, too!

Spanning the first two weeks of August 2025, Pharmaceutical Technology® and Biopharm International® conducted a survey on the impacts of Trump-era tariffs and trade policies on the organizations at which you and your peers in the bio/pharmaceutical industry work. Responses reveal that most perceive tariffs as a major influence on their operations and supply chains, with nearly half reporting significant effects and another large segment anticipating moderate impacts. In navigating these challenges, companies are actively adapting their strategies, primarily by increasing investment in trade compliance and diversifying supply bases, to mitigate risks rather than relying on a single approach, such as reshoring.

Tariffs most strongly affect finished product trade but also disrupt earlier supply chain stages and regulatory processes, pushing firms to pursue a balance between reshoring, supply chain flexibility, and regulatory mitigation tactics. Looking ahead, respondents expect future administrations to moderate but not eliminate tariffs, prompting ongoing uncertainty that most organizations address through partial readiness and evolving trade strategies. Broadly, rising costs, supply chain strain, and policy uncertainty emerge as key challenges, while respondents emphasize the need for policies that strengthen innovation incentives and create stable, predictable trade environments supporting supply chain resilience and fair drug pricing. These insights underline a theme of pragmatic adaptation amid complexity and evolving policy landscapes.

Read on the delve into the findings from each of the nine survey questions.

1. To what extent will Trump-era tariffs affect your organization's operations or supply chain?

Nearly half of respondents (49.4%) report that tariffs will significantly affect their operations or supply chain, with another 36.8% seeing moderate effects, showing that Trump-era tariffs are broadly perceived as a major driver of operational decisions (Figure 1). A smaller portion are unsure (5.7%) or report only slight/no impact (8%), highlighting uncertainty in how tariffs affect different organizations and tying to the need for companies to adapt their strategies—through diversification, compliance, or reshoring—to manage potential disruptions. Essentially, tariffs are a major concern for most (indeed, only 1.1% said their company isn’t impacted at all), and companies are navigating uncertainty through strategic adjustments.

Figure 1: Responses to “To what extent will Trump-era tariffs affect your organization's operations or supply chain?”

2. How will Trump-era trade policies influence your company's long-term supply chain strategy?

The nearly one-half (48.3%) of respondents who said their organization plans to increase investment in trade compliance was the largest single response, showing that companies are focused on ensuring they can navigate tariffs, customs rules, and regulatory complexities without disruptions (Figure 2). Still, almost two-fifths (37.9%) say their company plans to diversify their supplier base, indicating that companies are hedging against geopolitical risk and trade uncertainty by spreading sourcing across multiple countries or suppliers. A much smaller, but notable, segment (6.9%) is moving production closer to home to reduce reliance on global supply chains exposed to tariffs. Only a tiny fraction (2.3%) feel the policies don’t affect their company.

Figure 2: Responses to “How will Trump-era trade policies influence your company's long-term supply chain strategy?”

3. Which areas of your organization have been or will be most impacted by Trump administration tariffs or trade restrictions?

Respondents were directed to choose all potential responses that applied, so the total percentage does not equal 100. That said, finished product trade is clearly the biggest pressure point, with 72% identifying finished product imports/exports as the most impacted area, showing that tariffs and restrictions are hitting organizations most directly at the market-facing end of the value chain, where pricing, competitiveness, and global sales are affected (Figure 3). Approximately one-fifth cited API sourcing (22%) and raw materials (21%), highlighting vulnerabilities earlier in the manufacturing process, with another 23% noting equipment procurement as impacted, showing tariffs also disrupt capital investment and infrastructure. Secondary but meaningful impacts on innovation and regulation were seen, with 13% flagging R&D and 15% noting regulatory timelines as being impacted, suggesting that trade policies also slow development pipelines and approval processes. Only 4% selecting “no significant impact” as their response underscores how broadly tariffs and trade restrictions are felt across the sector.

Figure 3: Responses to “Which areas of your organization have been or will be most impacted by Trump administration tariffs or trade restrictions?” Respondents could choose more than one response.

4. Will your organization take any of the following steps in response to tariffs?

While it should be noted that respondents were instructed to pick all responses that apply, their responses suggest that most organizations are not standing still, with only 4% saying theirs is taking no specific action and the vast majority planning proactive responses like shifting sourcing, investing in domestic manufacturing, or applying for exclusions (Figure 4).

The 33% who said their company plans to invest in US manufacturing indicates that the tariffs are nudging some companies toward reshoring, though not universally. Still, nearly one-third expect their organization to apply for exclusions, showing that many are trying to reduce exposure through regulatory channels rather than restructuring operations entirely. A practical strategy to reduce costs without fulling committing to US-based production was seen among the roughly 26% who indicated their company plans to shift sourcing to non-tariffed countries. These three responses point to a clear trend: organizations are balancing domestic reshoring with supply-chain flexibility rather than relying on one single strategy.

Thankfully for these companies and the patients they ultimately serve, less than one-quarter said they plan to absorb costs (17%) or pass them to customers (5%), suggesting they see active operational adjustments as more sustainable than simply eating the costs or raising prices.

Figure 4: Responses to “Will your organization take any of the following steps in response to tariffs?” Respondents could choose more than one response.

5. Do you expect future US administrations to maintain or roll back these types of tariffs affecting pharma/biopharma trade?

With only 4.6% saying they are unsure, responses indicate that most respondents feel confident in making a prediction (Figure 5). Among those making a prediction, a strong majority (70.1%) believing future US presidential administrations will dial back tariffs but not eliminate them, reflecting a view that tariffs are unlikely to disappear entirely but may be softened or targeted more narrowly. Overall, results suggest expectations of a more measured, pragmatic trade policy approach in bio/pharma, rather than extremes.

Figure 5: Responses to “Do you expect future US administrations to maintain or roll back these types of tariffs affecting pharma/biopharma trade?”

6. How prepared is your organization to manage ongoing or future trade policy shifts?

Most organizations are in a middle ground, having taken steps to manage trade policy shifts but lacking full confidence (Figure 6). Indeed, the majority believe they have some systems or strategies in place but still see gaps in their readiness. Only a small fraction (13%) feel completely ready, while a notable minority remain exposed to risk; nearly 17% say they lack sufficient preparation, suggesting a meaningful segment remains vulnerable to disruption from tariff or policy changes.

Figure 6: Responses to “How prepared is your organization to manage ongoing or future trade policy shifts?”

7. Do you believe that the Trump administration's tariffs will be effective in encouraging the reshoring of bio/pharmaceutical manufacturing to the US?

Most respondents think tariffs may have some effect on reshoring, but confidence in them as a strong or sufficient policy tool is low (Figure 7). Many see them as only a partial lever, with other measures likely needed to meaningfully shift biopharma manufacturing back to the US.

Figure 7: Responses to “Do you believe that the Trump administration's tariffs will be effective in encouraging the reshoring of bio/pharmaceutical manufacturing to the US?”

8. What has been your organization's biggest challenge related to tariffs or trade policy since 2018? (open-ended question)

Two clear themes emerged from the response to this question. First, rising costs and supply chain strain. Tariffs are driving up input costs, destabilizing supply chains, and eroding competitiveness. The second theme is policy uncertainty and planning disruption. Constant policy shifts create uncertainty, making it difficult for companies to plan investments, production, and market strategies.

Select responses (lightly edited for clarity) include:

• “Since 2018, the biggest challenge our organization has faced in terms of tariffs or trade policies is the significant increase in costs and the decline in market competitiveness caused by the continuous adjustment of tariffs.”
• “Compliance and Administrative Burdens Navigating tariff exclusions, customs procedures, and rules of origin (e.g., under USMCA) required additional legal and logistical resources.”
• “Costs increase for API.”
• “Seeming non-targeted tariffs across sectors whether they are worth re-shoring or not. The focus appears to be on how best to throw off negotiation opponent but not on what one needs to get.”
• “There are few API sources in the US, and these can't be realized for years, if not decades. Pharma has no choice but to pay the increased prices, and pass that to the patient. Forcing [pharmacy benefit managers (PBMs)] to absorb more costs, or highly regulating them, could solve the patient-cost problem.A steady policy would help most of all, without the manipulating and grand-standing that only wastes more money than it will ever save. Generic industries will be put out of business by the demand for cheap products by the PBMs.”
• “Selling drug products to other countries.”
• “The cost of consumables has gone up significantly and their availability is becoming reduced or scarce.”
• “Taking the US-China trade disputes as an example, in 2018, the Trump administration imposed a 25% tariff on Chinese home appliances, which led to a rise in the cost of our exported products such as refrigerators and washing machines to the United States. This made our products lose their price competitiveness in the US market, and our market share was squeezed by South Korean brands such as LG and Samsung. Moreover, the continuous escalation of trade frictions has brought great uncertainty to our business operations. We have to constantly adjust our procurement, production, and sales strategies to adapt to the changes in tariff policies, which has increased our management costs and operational risks. At the same time, the complexity and volatility of trade policies have also affected our long-term planning and investment decisions, making it difficult for us to formulate stable business development strategies.”
• “We lost two significant orders for process equipment for Chinese and Irish pharmaceutical manufacturers due to the uncertainty of tariffs, roughly 1/3 of our annual revenue target.”
• “To adapt on time with changes.”
• “To avoid tariff barriers or geopolitical risks, enterprises are forced to adjust their supply chains (such as ‘nearshoring’ and ‘friendly offshore contracting’). However, during the reconfiguration process, they encounter problems such as high investment costs, long production capacity transfer cycles, and great difficulty in adapting to new markets. As a result, the efficiency and cost pressures increase significantly in the short term.”
• “Uncertainty in Trade Policy Frequent shifts in tariff exemptions, renewal of the Generalized System of Preferences (GSP), and negotiations (e.g., USMCA, Phase 1 China deal) created planning difficulties. Companies hesitated on long-term investments due to unpredictable trade environments.”
• “Changing landscape makes it difficult to plan. We cannot adjust if the rates are changing between countries as well as the rates.”
• “Constantly changing parameters!!!!”
• “Balancing cost control with regulatory compliance while maintaining product quality. Tariffs forced us to either absorb costs (hurting margins) or find new suppliers (risking quality). In 2020, a last-minute tariff hike on Chinese APIs made us switch to a European supplier—their product failed our third-party tests twice. We lost 6 weeks of production and $2M in rework costs. Navigating these trade policy whiplash moments, where speed clashes with quality, has been our biggest nightmare.”
• “Frequent adjustments to tariff rates and tax collection scopes make it difficult for enterprises to formulate long-term supply chain plans. Cost accounting, order fulfillment, and market layout all experience significant fluctuations.”
• “We originally planned to expand overseas production bases to meet international market demand. However, due to sudden adjustments in trade policies, we may face issues such as restricted imports of raw materials and hindered exports of products. This makes it difficult to advance the preliminary plans and increases operational risks and costs.”
• “I’m in the business of therapy outsourcing from Europe. For new therapies that weren’t invented here, it upsets the economic modeling and market access plans that took years to develop and refine. Changing these around to conform with an unpredictable trade policy is going to be expensive in time and money.”
• “There are several challenges. 1. the uncertainty; 2. it is retroactive to orders already in the pipe; 3. reduces margin; 4. increases cost to our customers so they have to stop orders and go get more funding.”
• “The sharp price increases from 2020-2024 have acclimated us well to any tariff impact.”

9. What policy changes would most benefit your company and the broader bio/pharma industry? (open-ended question)

Among the two strong themes that emerged from the responses to this question was strengthening innovation and R&D incentives. Many called for policies that make it easier and more rewarding to develop new drugs. In short, respondents want polices that reduce barriers to innovation and ensure companies can recoup R&D investments.

The other strong theme was trade, supply chain, and pricing reform, particularly making the supply chain more resilient and the market more transparent. Respondents want predictable, tariff-light trade policies that stabilize costs while protecting supply chains and ensuring fair drug pricing.

Select responses (lightly edited for clarity) include:

• “Trade and supply chain resilience, elimination of tariffs on critical inputs (e.g., APIs, single-use bioprocessing materials) and streamlined customs processes for temperature-sensitive shipments.Policies to diversify API production (e.g., incentives for US/EU manufacturing while avoiding overreliance on any single region). Pricing and reimbursement reform, greater transparency in PBM (pharmacy benefit manager) pricing models and value-based payment frameworks for innovative therapies. International reference pricing safeguards to avoid disproportionate cost pressures.”
• “Giving play to the role of industrial funds: policies that strengthen investment and financing support, such as giving play to the role of biopharmaceutical industry mother funds, equity investment funds, and innovation transformation funds, can provide sufficient funds for enterprise R&D, production, and expansion, and help enterprises grow and develop.”
• “Simplifying the procedures for international multi-center clinical trials: This can help domestic innovative drugs accelerate their ‘going global’ process, enable enterprises to carry out R&D and clinical work according to international high - standards, improve the ‘gold content’ of innovation, and open up a broader market outside China.”
• “1. Streamline drug approval and regulatory processes. Accelerate FDA reviews for breakthrough therapies while maintaining safety standards. Harmonize global regulations (e.g., mutual recognition agreements with EU, UK, Japan) to reduce redundant clinical trials. Modernize manufacturing standards (e.g., adopt continuous manufacturing, AI-driven quality control). 2. Reform intellectual property (IP) protections. Extend patent exclusivity for novel biologics (beyond 12 years) to incentivize high-risk R&D.Prevent premature generic/biologic competition by closing loopholes (e.g., ‘skinny labeling,’ patent evergreening concerns).Strengthen trade secret protections in international markets (e.g., China, where IP theft remains a risk). 3. Tax and R&D incentives. Permanent R&D tax credits (instead of periodic renewals) to support long-term innovation. Repeal or delay drug pricing provisions in the Inflation Reduction Act (IRA) that could discourage investment in small-molecule drugs (e.g., Medicare price negotiations after 9 years vs. 13 for biologics). Expand R&D grants for rare diseases, antimicrobial resistance (AMR), and next-gen therapies (e.g., gene editing, mRNA).4. Trade and supply chain policies. Eliminate tariffs on critical pharma inputs (e.g., APIs, specialty chemicals) to reduce production costs. Diversify API supply chains via incentives for US/allied production (e.g., India, EU) to reduce reliance on China. Expedite customs clearance for temperature-sensitive biologics to prevent spoilage.”
• “Shortening the review and approval cycle: Policies that compress the review time for drug supplementary applications, drug clinical trial applications, and medical device reviews, such as implementing national registration review and approval reform pilots, can enable products to be launched on the market faster, shortening the time for R&D investment to be converted into commercial returns.”
• “Extend patent lifespan.”
• “Require quality and the ability to supply to be the main drivers behind formulary/PBM choices. Cost has been, and continues to be, the driving factor behind which products are covered. Better yet, make health insurance carriers and PBMs be non-profit, and pay reasonable salaries, not bloated salaries/bonuses based on how much money they can make at the patient's expense.”
• “Strengthening the construction of clinical resources: policies to increase the number of research-type beds and build shared research-type wards can provide more clinical resources for drug R&D, accelerate the progress of clinical trials, and improve the efficiency of R&D.”
• “The policies that nurture R&D would be most beneficial. Exclusive pricing for R&D establishments would be very good.”
• “Formulation of the innovative drug catalog: It is clearly proposed to formulate a catalog of innovative drugs, which lays the foundation for the full-chain industrial policies of innovative drugs and helps establish a diversified and multi-level drug price formation mechanism. The R&D of innovative drugs is the core competitiveness of biopharmaceutical enterprises. The formulation of the innovative drug catalog will provide a basis for the full-chain industrial policies such as pricing, payment, and sales of innovative drugs, accelerate the clinical application of innovative drugs, improve accessibility, and bring more market opportunities for enterprises.”
• “Target on small molecule development.”
• “Return free trade and stop the tariff nonsense. This is a global economy.”
• “Clearly apply medical insurance data to research and development practices, and encourage commercial insurance funds to participate in innovation investment.”
• “We need more longer-term plans. We also need to make better decisions regarding what we tariff and the amounts. Also, we need to maintain our technology and not lose it to other countries.”
• “First, a clear, long-term tariff exemption framework for critical biopharma inputs and APIs, specialized raw materials. Constantly renegotiating exclusions wastes time and money. Second, tax incentives for domestic biomanufacturing R&D—help us build the ecosystem needed to reshore without crippling costs. And finally, a unified federal-state trade policy for biopharma—right now, state tax breaks clash with federal tariffs, creating chaos. These three changes would stabilize costs, spur innovation, and make the US a viable biopharma manufacturing hub again.”
• “A tighter compliance regimen to reduce cheating, particularly on IP security, [current good manufacturing practice] compliance matters for companies abroad, and a clearer long-term path for trade policy that keeps prices static. Since most therapy components are unlikely to be manufactured in the US competitively, Trump policies have no long-term durability in controlling drug pricing, particularly on chemical drugs.”
• “Removing tariffs for R&D products. Increase R&D funding by the government.”
• “Any policy change that reduces approval time for biosimilars would help.A revisit of the BPCIA, particularly expanding allowances for abbreviated pathways would help us.”

Reflecting on the findings

The survey findings underscore that Trump-era tariffs are profoundly reshaping the bio/pharmaceutical landscape, creating significant cost increases and supply chain vulnerabilities, particularly in finished product trade and critical input sourcing. In response, companies are not merely absorbing costs but proactively investing in trade compliance and diversifying global supply chains, often balancing reshoring efforts with a focus on flexibility and regulatory exclusions. Despite these adaptations, the industry continues to grapple with pervasive policy uncertainty and administrative complexities, which hinder long-term planning and investment. Looking ahead, the bio/pharma sector largely anticipates a moderation, but not elimination, of tariffs and recognizes a general state of "middle ground" preparedness for future trade shifts. Ultimately, the industry's call to action is clear: it seeks stable, tariff-light trade policies that foster supply chain resilience and fair drug pricing, coupled with robust government support to strengthen innovation and R&D incentives, including extended patent protections and streamlined approval processes, to ensure continued development of vital therapies.