Targeted US tax proposals target the risk of pharmaceuticals taking away money from research and development and reducing future medical disruption, said CEO Sebastian Guth in an exclusive interview with Arabian business.
“Every dollar we spend on $1 tax rates we can’t spend on research and development,” Guth said, calling for long-term trade to outweigh short-term financial results.
“The impact can be felt in 10 or 15 or 20 years,” he added, noting the long timelines and high rates of development in drug development.
US Tariffs Threaten Global Pharma Trade
Guth’s views appear as the United States has more weight under President Donald Trump’s “America First,” which includes the proposed 25 percent on imported drugs from countries that are available for trade – especially Ireland, Japan and India.
According to PWC’s Analysis of US Customs Tariffs .
A National Security Review of chemical imports by the US Department of Commerce, expected later this month, could determine whether branded drugs remain subject to tariffs. Trump has already imposed 100 percent fixed prices on branded and generic drugs, which he used as investiture to discuss price reductions under the so-called Trumprx step. PFizer, for example, secured a three-year exemption after introducing lower prices and expanding domestic production. Generics are always included in current methods.
Guth described the global trade debate as “still fluid.”
“As you think about trade agreements, the ink is not yet stopped on any of these trade agreements … We are still in the midst of policy discussions in the United States and beyond,” he said.
He acknowledged some of Washington’s concerns about price diversification, but warned that restrictive policies could set back innovation around the world.
“American patients today pay almost a greater share of … Innovations that occur in the pharmaceutical industry than patients in other rich countries around the world,” says the social contract “between the industry, regulators and patients.
Given the economics of the sector, Guth emphasized the importance of stable policy frameworks.
“As an industry, what we need are tangible areas of control,” he said. “It takes, on average, about 15 years and about $2 billion to bring a new drug to market, with more than 95 percent of ideas failing there.”
In terms of manufacturing, Guth said Bayer said Bayer is reviewing its global supply chains to strengthen resilience without sacrificing efficiency – a process accelerated by lessons learned during the pandemic.
“We, like everyone else, are reviewing our supply chains at this time,” he said, adding that the company is “preparing to tolerate some cash outflows” while managing costs.
While he declined to comment on the specific implications of US policy, Guthu reiterated that the tariffs threaten to divert valuable resources from the science that drives this field forward.
“If you’re wondering if we can have a big impact… Then it’s the advancement of science. That’s what we want our money to be used for,” he said.
