Johnson & Johnson warns that pharma tariffs could lead to drug shortages

Johnson & Johnson's CEO has cautioned that any US tariffs on the pharmaceutical sector may result in medication shortages. The Trump administration has made it plain that it is considering utilizing the broad tariffs that were announced this month to attempt to increase domestic manufacturing, even though the industry was left out.

Due to a 1994 World Trade Organization trade agreement exemption, the US does not currently impose duties on pharmaceuticals. Joaquin Duato, who leads one of the world’s biggest pharma and medical devices companies, said in a call with analysts on Tuesday: “There’s a reason why pharmaceutical tariffs are zero. It’s because tariffs can create disruptions in the supply chain, leading to shortages.”

Medical devices, AI –Powered solutions and technology such as the surgical robots made by J & J have been hit by the new US tariffs. “If what you want is to build manufacturing capacity in the US, both in med tech and in pharmaceuticals, the most effective answer is not tariffs but tax policy,” Mr Duato said. Over the next four years, J & J plans to invest $55 billion (€8.8 billion) in new plants in the US, a 25% increase over the previous four years, the company revealed in March. Mr Duato said he thought it was important for healthcare companies to work with the administration to “mitigate some of the vulnerabilities that exist. In our healthcare supply chain”, in response to a question about the investigation and potential tariffs.