Trump Administration's Tariff Threats and Reference Pricing Could Crash AbbVie, Eli Lilly, and Johnson & Johnson Stocks

The Trump administration's plan to levy tariffs on drug imports and potentially implement international reference pricing for Medicare and Medicaid prescription drugs poses a significant threat to AbbVie, Eli Lilly, and Johnson & Johnson. Tariffs could increase the companies' costs, while reference pricing could link U.S. drug prices to those in other countries, potentially impacting the companies' profitability. Investors should be cautious about holding these big pharma stocks.

The Trump administration's plan to levy tariffs on drug imports and potentially implement international reference pricing for Medicare and Medicaid prescription drugs poses a significant threat to AbbVie, Eli Lilly, and Johnson & Johnson. These measures could increase the companies' costs and potentially link U.S. drug prices to those in other countries, impacting their profitability.

AbbVie, which reported strong Q1 2025 earnings, is particularly vulnerable. The company's immunology portfolio, poised to continue growing through Humira erosion, could be negatively impacted by tariffs. Analysts have noted that AbbVie's commercial contracting team has shown prowess in pushing product sales, but tariffs could disrupt this momentum [2].

Eli Lilly, which announced a $27 billion investment in U.S. manufacturing, faces similar challenges. Tariffs could increase production costs, potentially elevating drug prices and raising affordability concerns [1]. Additionally, international reference pricing could limit Eli Lilly's pricing power, impacting its profitability.

Johnson & Johnson, which plans to spend over $55 billion on U.S. plants, is also at risk. The company's extensive pipeline, including new treatments for schizophrenia, could be delayed or derailed by tariffs and international pricing [3]. The company's ability to manage costs and maintain profitability will be crucial in navigating these challenges.

Investors should be cautious about holding these big pharma stocks. While the companies have shown resilience and growth, the proposed policies could introduce significant headwinds. It is essential to monitor these developments closely and consider the potential impacts on the companies' financial performance.

References:

[1] https://www.cnbc.com/2025/04/30/healthy-returns-trumps-pharma-tariffs-fuel-new-us-investments.html
[2] https://www.benzinga.com/25/04/45050728/abbvies-immunology-portfolio-poised-to-continue-growing-through-humira-erosion-analyst
[3] https://www.globenewswire.com/news-release/2025/05/01/3072160/28124/en/Schizophrenia-Drugs-Market-Size-and-Shares-Analysis-2025-2033-Featuring-H-Lundbeck-Pfizer-AbbVie-AstraZeneca-BMS-Eli-Lilly-GlaxoSmithKline-Johnson-Johnson-Novartis-Takeda-Pharmaceu.html