Sandoz CEO warns of risk of higher generic drug prices in the US
In the United States, tariffs on imported generic drugs proposed by President Donald Trump could lead to higher prices for patients or the discontinuation of supplies of some medicines. Sandoz CEO Richard Saynor said this in an interview with CNBC during the company’s capital markets day.
According to Saynor, manufacturers will not be able to supply products systematically at significant losses. Therefore, under high tariffs, they may either raise prices or discontinue supplies of certain medicines.
Potential tariffs on generics
In July, Trump said that imported generic medicines could be subject to a 100% tariff starting in 2028, while the rate could rise to 200% the following year. The US administration seeks to encourage pharmaceutical companies to move production to the United States.
Generic drugs are currently exempt from the US administration’s pharmaceutical tariffs introduced under Section 232. A White House representative told CNBC that the administration intends to use all available tools to bring critical manufacturing and supply chains back to the country, citing shortages recorded during the Covid-19 pandemic.
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Generic drugs account for about 90% of prescriptions in the United States, but due to their lower cost, they represent a relatively small share of total drug spending. Saynor also noted that a significant portion of pharmaceutical ingredients is produced outside the country.
Sandoz’s plans for biosimilars
Sandoz, one of the world’s largest manufacturers of medicines whose patent protection has expired, generates approximately one-quarter of its revenue in North America, including Canada. The company plans to more than double net sales by 2035 and raise its core profit margin above 30%.
Sandoz also intends to expand its biosimilar portfolio from the current 13 products to more than 100 by 2040. The company expects to benefit from a wave of exclusivity expirations for branded medicines, including in immunology and oncology.
