Threat of US Drug Tariffs Creates Uncertainty for Swedish Pharmaceutical Industry
US drug tariff threats pose challenges for Sweden's pharmaceutical sector, with few firms considering relocation.
Key Points
- • Threat of high drug tariffs from the US raises concerns in Swedish pharmaceutical industry.
- • Few firms consider relocating to the US due to long establishment times for new factories.
- • AstraZeneca plans a $50 billion investment in the US, vital for the Swedish economy.
- • Swedish government exploring tax incentives for research and development in pharmaceuticals.
The Swedish pharmaceutical industry is facing significant uncertainty as the United States threatens to impose high drug tariffs. Despite the looming tariffs, few companies in Sweden are considering relocating to the US, emphasizing the complexities involved in such a move. Jessica Martinsson, CEO of Sweden Bio, which encompasses over 300 life science companies, noted that establishing a new factory in the US would take longer than a single presidential term, making relocation impractical.
The US is Sweden’s largest export market for pharmaceuticals, which raises serious economic concerns for the industry. Many firms within the sector are anxious about the potential financial consequences of these tariffs, especially since AstraZeneca, which accounts for nearly 70% of Sweden's pharmaceutical exports, has recently announced a historic $50 billion investment in the US. This investment includes the establishment of a new manufacturing facility in Virginia.
In response to the tariff threats and to ensure the competitiveness of its pharmaceutical sector, the Swedish government is investigating potential measures, including tax incentives aimed at fostering research and development. Proposals for these measures are anticipated to be presented by January 2026. As these discussions continue, the industry remains on edge, given the reliance on a stable trading relationship with the US and the possible long-term implications of tariff imposition.
Industry leaders stress the importance of focusing on sustainable investment, especially in light of significant threats that could stifle growth. Furthermore, while a tariff agreement exists between the EU and the US, unresolved issues regarding drug tariffs remain a concern, particularly as indicated by the US Trade Secretary's comments regarding the potential tariffs on non-US manufactured drugs.