Asian Pharma Stocks Slide After Trump’s Tariff Threat

Shares of pharmaceutical companies across Asia fell on Friday after U.S. President Donald Trump threatened to impose 100% tariffs on branded drug imports starting October 1, unless their producers had already begun manufacturing at U.S. plants.

While markets had anticipated potential tariffs on certain pharmaceutical products, long a focus of Trump’s rhetoric, companies with significant exposure to the U.S. market took the hardest hit. Japan’s Sumitomo Pharma (4506.T) dropped 4.3%, while Australia’s CSL (CSL.AX) fell to a six-year low.

Lorraine Tan, director of equity research for Asia at Morningstar, said past negotiating patterns suggest the final tariff rate could be lower, but near-term uncertainty is weighing on share prices. Other analysts noted that the impact on Asian firms may be limited, as most focus on generics rather than branded drugs.

“These are branded medicines—it doesn’t affect the generic drugs supplied largely by China and India,” said Ken Peng, head of Asia investment strategy at Citi Wealth. He added that much of China’s recent healthcare growth has come from licensing intellectual property from U.S. and European firms, while the biggest branded drug exporters to the U.S. are Europe, Switzerland, and to some extent Japan.

A Tokyo trade negotiator pointed out Friday that the EU has a trade deal with the U.S. that sets a 15% tariff on pharmaceuticals, while Japan’s agreement ensures its tariff rates will not exceed those of the EU or other partners.

In Japan, Otsuka Holdings (4578.T) fell 3.5% and Daiichi Sankyo (4568.T) slid 1.6%, while Takeda Pharmaceutical (4502.T) gained 0.2% and Shionogi (4507.T) rose 1.3%. Takeda CEO Christophe Weber said in July the company maintains its largest global manufacturing presence in the U.S. Japan exported $2.5 billion worth of pharmaceuticals to the U.S. in 2024, according to U.N. Comtrade data.

Hong Kong’s Hang Seng Biotech Index (.HSBIO) slipped 1.4%. India’s pharmaceutical index (.NIPHARM) fell 2.6%, with all 20 members down, despite the industry’s focus on generics exempt from tariffs. Sun Pharmaceutical Industries (SUN.NS), the country’s largest drugmaker, lost 3.4%.

Australia Calls Tariffs “Unreasonable and Unfair”

In Australia, Health Minister Mark Butler told reporters the government was assessing the implications of what he called “unreasonable and unfair tariffs,” introduced after two decades of free trade. Australian healthcare firms exported about A$2.1 billion ($1.37 billion) in medicines and pharmaceuticals to the U.S. last year.

CSL shares fell as much as 5% before paring losses to close down 2%. The company said its “substantial manufacturing presence” in the U.S. means it does not expect a major impact. Cancer-treatment biotech Telix Pharmaceuticals (TLX.AX) and medical imaging company Pro Medicus (PME.AX) both lost about 2.8%. Telix reiterated in a previous statement that its primarily U.S.-based business would be unaffected, while Pro Medicus declined to comment.

($1 = 1.5288 Australian dollars)