The two articles quoted below provide food for thought in the current situation.
The first highlights the massive challenge that Big Pharma faces if it responds to the Trump administration wishes by attempting to move full manufacturing back to the US.
The second article highlights the significance of IP residence, as referenced with respect to trofinetide by Catherine Owen Adams in the Needham fireside chat held earlier this week.
“It’s not like you can sole source the full manufacturing of many drugs just to the United States or pick your favorite friendly [country] that we have the lowest tariffs on,” KPMG’s Stoll told Fierce Pharma last week, cautioning companies against making any major manufacturing decisions purely “as a reaction to policy.”
Building a new manufacturing facility from scratch can cost up to $2 billion and take between five and ten years before the plant is up and running, trade organization the Pharmaceutical Research and Manufacturers of America (PhRMA) explains on its website.
The typical large U.S. pharmaceutical company reports losing money on their U.S. operations. Lots of money apparently….
It is a direct function of keeping intellectual property offshore, investing to produce valuable patent protected drugs offshore, and booking the profit on U.S. sales offshore. In other words, it’s the predictable result of the tax and production structures that most large U.S. pharmaceutical companies have adopted following the 2017 Tax Cut and Jobs Act (TCJA).
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)