Sandoz to Engage US Policymakers After Trump Threatens Steep Tariffs on Foreign-Made Drugs

Swiss generic drugmaker Sandoz announced Wednesday it will continue discussions with U.S. policymakers following a threat from President Donald Trump to impose steep tariffs on pharmaceutical companies that do not manufacture their medicines domestically. The company's shares fell approximately 3% in early trading after the news.

The Tariff Proposal

In a post on the social media platform X on Tuesday, President Trump stated that generic drugmakers would face a 100% tariff beginning in August 2028 if they do not manufacture U.S.-bound medicines locally. The post added that the tariff would increase to 200% the following year.

The policy aims to reverse the decades-long shift of drug production to lower-cost countries. According to the U.S. Food and Drug Administration (FDA), more than 90% of all medicines sold in the United States are generics.

Sandoz's Position and Market Impact

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In a statement, Sandoz said, "We share the goal of improving affordability and access to medicines in the United States," and confirmed it would engage with officials on how best to achieve this. The company noted it was too early to assess the full implications for its manufacturing operations or investment plans.

The potential tariffs create uncertainty for Sandoz, which derives around 22% of its sales from North America but has a limited production footprint in the region. The company previously announced in 2024 its plan to close its only U.S. manufacturing site in Long Island, New York, around the end of 2026.

Analyst Outlook

Analysts suggest that forcing a return of drug manufacturing to the U.S. would likely lead to higher prices for generic medicines. Stefan Schneider, an analyst at Vontobel, noted that while any new rules would predominantly affect manufacturing hubs like China and India, they would also weigh on European drugmakers like Sandoz, according to a Reuters report.