According to informed sources, pharmaceutical companies are urging the Trump administration and EU officials to exclude medical products from the escalation of the trade war to avoid a surge in prices for best-selling drugs produced in Europe, from Novo-Nordisk A/S's weight loss drug Wegovy to Merck's cancer immunotherapy Keytruda.

According to six industry insiders who are directly aware of the discussions, the pharmaceutical industry emphasized during communications with US officials that the imposition of tariffs by the EU will increase drug costs, create access barriers for patients, and jeopardize the priorities set by President Trump regarding drug pricing and improving life expectancy for Americans under the health executive order.

Three informed sources stated that some pharmaceutical companies are signaling a willingness to expand production in the USA while also requesting tax breaks and regulatory reforms to facilitate this.

An executive from a European pharmaceutical company stated: "We are firmly communicating to the Trump administration and the EU that patients will bear the cost of the tariffs."

Several sources indicated that industry executives are also communicating with Brussels officials, calling for the EU to delay retaliatory tariffs even if Trump includes pharmaceuticals in the trade dispute. Some mentioned the precedent of exempting lifesaving medications from Western sanctions against Russia after the Russia-Ukraine war.

Another executive from a major European pharmaceutical company pointed out: "Western countries have a deeply intertwined supply chain in this field, and interrupting this flow will jeopardize patient access to lifesaving medications, resulting in a lose-lose situation."

Due to potential hazards, Pharmaceuticals have traditionally been exempt from trade wars. However, Trump's increase in tariffs on Chinese Commodities (including finished drugs and raw materials), along with the first round of tariffs imposed by the USA and Europe on Commodities such as Steel and whiskey, has raised expectations that Pharmaceuticals will also be added to the tariff list.

The Medical supplies imported by the USA from China are mostly low-value products, but there is a reliance on Pharmaceuticals produced in Europe, which bring in hundreds of billions of dollars in revenue.

For example, Novo-Nordisk A/S produces part of the Wegovy active ingredients in Denmark, and Merck's Keytruda and AbbVie's Botox are produced in Ireland. The CEO of Novo-Nordisk A/S stated that tariffs would cause a short-term shock, but they are promoting localized production in the USA, announcing a $4.1 billion expansion of their North Carolina plant last year.

Simon Baker, head of Global Biopharmaceutical Research at Redburn Atlantic, stated that the US government is the main buyer of Pharmaceuticals for its extensive Medical Insurance and Medical Assistance programs. In response to tariff costs, the US government may face higher prices.

Emily Field, head of European Pharmaceutical Stocks Research at Barclays, indicated that until recently, she believed that tariffs on prescription drugs were not a serious threat. Now she is 'constantly being asked about this issue' by clients.

Industry insiders declined to reveal Trump's administration's response to their information. The US President had previously announced tariffs on trade partners but later suspended or postponed them, or allowed exceptions. One insider stated that it is impossible to know which of the several trade policy ideas from the White House would prevail.

Trump accused Ireland last week of attracting Pharmaceutical companies with tax cuts, leading to its 'huge deficit.'

The COVID-19 pandemic has highlighted the USA and Europe's reliance on China and India for the production of essential Pharmaceuticals and Hospital supply raw materials, as governments compete for the materials needed for vaccines and protective equipment.

Since then, many large Pharmaceutical companies have tried to separate the supply chains of the Western and China markets. However, several sources have indicated that the idea of separating production ties between Europe and the USA has not been seriously considered.

Eli Lilly and Co recently announced plans to invest at least 27 billion USD to build four new manufacturing plants in the USA, but many Pharmaceutical companies find it difficult to follow suit.

According to the industry trade organization PhRMA (Pharmaceutical Research and Manufacturers of America), building a new production facility in the USA could cost as much as 2 billion USD and take 5 to 10 years to become operational, which includes the time and costs associated with meeting regulatory requirements.

An executive from a European Pharmaceutical company stated that establishing a completely USA-based manufacturing process would mean diverting research funds from future drugs, and it would be "fixing a problem that does not exist."