If you own any Pharmacy companies and like most of them their products are made over seas this could be a tidal wave.
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U.S. Trade Deficit Hits Record as Companies Front-Load Pharmaceuticals
Businesses rushed to stockpile before “Liberation Day” tariffs took effect last month
One thing I’ve learned in 30 plus years of Pharma investing is that their “expertise” is in playing the bipartisan culture of political corruption in Washington rather than R&D.
Gov’t regulation and taxes rarely affect them. There’s always someone they can pay off to get relief.
From Marketwatch
{{ It’s also not clear how tariffs on pharmaceuticals would be calculated, and if the tax would apply to the country where the drugs’ active ingredient is manufactured, where the process is completed, or where the companies hold their intellectual property. }}
Manufacturing cost is usually trivial in Pharma. A $1,000 dose of Lilly’s Zepbound costs less than $5 to make. A 200% tariff on $5 is lost in the round-off.
intercst
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Typically, the tariff is applied on the declared value. There are penalties for under valuing imported goods, but I don’t know how strictly that is enforced.
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That is true it could be that they don’t even get tariffed if the bribe is big enough that is why there is so much uncertainty.
More funny math? You sure it’s only a 200% tariff on only $5 dollars? Or do you think in reality it might be much more? It’s funny because even the drug companies can’t give a number.
** Jorgensen did not estimate how much he expects the price of the drugs to be adjusted due to tariffs. The company, however, is planning to make more medications for Americans within the U.S., announcing plans last year to build a $4.1 billion factory in North Carolina.**
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Nope. Just 30 years of experience that shows that Pharma never pays in taxes what you’d think it does.
Maybe this time it’s different, and you can rely on Trump not being “on the take”, but I doubt it. {{ LOL }}
intercst
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That would be the bribe I mentioned. But here is the thing, Trump said he wanted pharmaceutical manufacturing back in the states. If he tariffs 5 dollars of product that isn’t going to happen so he has to have a mechanism to get them to come back. Since he likes to make them pay I suspect it will be something like you can only make so much percentage over the cost of your product. Let’s say it’s 100 percent. Well 100 percent of 5 dollars is less than 100 percent of 50 dollars. I am not saying that is what is going to happen but I can be almost certain a tariff on 5 dollars isn’t going to help him reach his goal.
Yep. I’m importing it as a ‘goods in process’ that’s worth it’s $5 manufacturing cost. It’s not worth $1,000 until we put the Lilly label on the package once it reaches the US and ship it to our distributor.
intercst
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In that case, how much does a memory card that holds the latest blockbuster film cost to make? Maybe $10 or so? So the tariff on imported films will also be negligible using similar logic!
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Is the film on the card when it is imported?
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Yep. It just depends on where the intellectual property resides.
My understanding is that they’re trying to put a tariff on the foreign production cost of a film (e.g., if your spending $40 million in Vancouver BC filming a production and hiring actors, they’re going to tariff that.
intercst
Wait till they go after software.
More for us: soybeans, sorghum, software.
I’ll just double my order and buy two licenses, I’ll have a backup when the first one breaks or is hacked.
Instead of keeping my excessive 250 pencils sharp, I’ll work on system resiliency, they say “systems should have redundancies.”
Doing my part.
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