Life sciences execs show resilience to tariffs, policy changes

By Jay Bhatt, D.O., managing director of the Deloitte Center for Health Solutions, Deloitte Services LP, and Theresa Walker, tax specialist leader, Global Trade Advisory, Deloitte Tax LLP

More than 90% of pharmaceutical and medtech executives expect recent tariff developments to have either a ‘significant impact’ (38%) or ‘some impact’ (56%) on their businesses, according to the results of a new survey from the Deloitte Center for Health Solutions. In addition, 79% of life sciences executives expect recent tariff developments and policy changes to have the greatest influence on their companies within the next 12 months. When we asked the same question last October, 34% of life sciences executives said the greatest impact would occur over the next 12 months (see LSHC Execs are reacting to tariffs, policy shifts...but is it enough?).

Deloitte surveyed 120 global pharmaceutical and medtech executives (between April 20 and April 29) to determine how their companies are responding to the recent US trade policy and legal developments. The survey results indicate that tariffs, taxes, and policy shifts are now widely viewed as part of the current operating environment, rather than as an unexpected disruption. Thirteen percent of survey respondents said they are absorbing additional costs internally or in margin. The findings mirror some first-quarter 2026 earnings calls where large biopharmaceutical companies generally downplayed the near-term financial impact of tariffs and bundled them into other anticipated headwinds.ⁱ Our analysis suggests medtech leaders expect tariffs to cost their companies significantly, but it is possible that the added expenses are absorbable and unlikely to derail growth or earnings.

More than 70% of all survey respondents said federal actions will influence their decisions about where to manufacture. Medtech respondents were more likely than biopharma respondents to say tariff developments and policy changes would affect their organizations within the next six months, 41% compared to 30%.

Here is an overview of some key findings from the survey:

• Section 232 and Section 301: It has been a year since the Department of Commerce launched a Section 232 pharmaceutical investigation into foreign-sourced drugs and their ingredients, aiming to identify vulnerabilities that could lead to supply chain disruptions or price hikes.ⁱⁱ Less than 10% of survey respondents said they do not intend to make changes in response to investigations, while 22% said they are taking immediate action, and 56% said they will re-evaluate it and take action within the next 90 days. On April 2, the White House issued an executive order imposing a 100% tariff on imported patented pharmaceuticals and active ingredients, targeting supply chain security under Section 232.ⁱⁱⁱ This tariff policy, which is aimed at giving companies a financial incentive to produce more products in the US, goes into effect on July 31 for large companies and September 29 for others. There are some exclusions and certain deals and arrangements with the US government can lead to relief. Moreover, the Office of the US Trade Representative has launched Section 301 investigations that could lead to additional tariffs. More than a third of respondents (36%) said they are planning changes in response to Section 301, and 28% intend to take immediate action regarding section 122 (global temporary tariff rate). Legal challenges to the Section 122 tariffs are ongoing.
• Costs and pricing: More than 90% of pharmaceutical manufacturers said trade or drug pricing actions would have a ‘significant’ (44%) or ‘some’ (51%) impact on the cost of goods and pricing strategies. While these are materially different issues, they can have an outsized combined impact on the cost of doing business. A small percentage (3%) of respondents do not expect to see an impact. A third of pharma respondents said they have already incorporated tariffs and Most Favored Nations (MFN) policies into their drug pricing strategies today; half are considering them. When it comes to drug policy, some biopharma companies have reached voluntary agreements with the federal government to sell pharmaceuticals through the TrumpRx portal and have agreed to MFN pricing for certain products.^iv
• Manufacturing: About half (44%) of all survey respondents said they are increasing regional or localized manufacturing in response to current or potential future tariffs. Thirty-five percent of pharma respondents said they did not expect trade or drug-pricing actions to affect research and development (R&D) while 22% said the impact would be ‘significant.’ Among medtech respondents, just 3% predicted a ‘significant’ impact while almost half (47%) did not expect any impact.
• New supply chain strategies: Nearly 70% of pharmaceutical manufacturers have made ‘moderate’ (57%) or ‘extensive’ (10%) changes to their supply chain strategy in response to recent tariff changes, uncertainty, or potential future trade actions. Similarly, 10% of medtech companies expect ‘extensive’ changes, while 48% expect supply chain changes will be ‘moderate.’
• Refunds: On February 20, 2026, the Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs. More than 60% of respondents expect tariff refunds will have a ‘significant’ (17%) or ‘some’ impact (45%) on their business. Sixteen percent of respondents did not anticipate the refunds would have an impact on their business. The ruling struck down tariffs applied to imports from Canada, Mexico, China, and other countries that were based on IEEPA, potentially unlocking billions of dollars in refunds for businesses. This included reciprocal tariffs. As of April 20, importers and customs brokers can submit certain IEEPA duty refund requests electronically.

Conclusion

The survey findings point to a sector that appears to be in active adaptation with pace (not crisis) management. Executives report that they are making decisions on manufacturing, supply chains, and product pricing that comply with MFN commitments and tariff exposure and making sequence capital investments across an uncertain but increasingly legible environment.

Life sciences executives should consider the following strategies:

• Map exposure with precision using a cross functional team: Companies should have a granular view of their active pharmaceutical ingredients (API), sourcing geography, and finished goods manufacturing footprint. They should also understand their IEEPA refund eligibility at a product level and consider tax implications of any refunds.
• Accelerate manufacturing-footprint decisions: The 44% of companies that are already increasing regional manufacturing reflects a window that is narrowing. Incentive structures, site availability, and regulatory timelines could favor early movers. Companies still in evaluation mode could miss an opportunity.
• Build pricing and market access strategies that anticipate further policy shifts: The posture toward pharmaceutical pricing could continue to evolve. Pricing strategy, tax function and government affairs along with R&D, supply chain, and manufacturing operate as a unified function.

The companies best positioned to thrive in this environment may be those that used this period to build durable structural resilience across supply, manufacturing, and pricing while continuing to invest in innovation.

Latest news from @DeloitteHealth

Endnotes

ⁱPfizer reports strong first-quarter results, May 5, 2026; Thermo Fisher Q1 2026 earnings transcript, April 23, 2026; GSK delivers strong Q1 performance, April 26, 2026
ⁱⁱTrump revives pharma tariffs with 100% charges, but leaves loopholes, BiopharmaDIVE, April 3, 2026
ⁱⁱⁱAdjusting imports of pharmaceuticals and pharmaceutical ingredients into the US, The White House, April 2, 2026
^ivGlobal pharma companies that have publicly announced Trump drug pricing agreements, Reuters, April 2, 2026

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

Return to the Health Forward home page to discover more insights from our leaders.