US Tariffs Will Raise Drug Prices for Patients, Sandoz CEO Says
(Bloomberg) — The US shift toward steep tariffs will likely make drugs more expensive and limit access for patients, according to one of the world’s largest makers of generic medicines.
Most generics and biosimilars in the US contain ingredients made elsewhere or are produced entirely abroad, which will hit consumers immediately, Richard Saynor, the chief executive officer of Sandoz Group AG, said in an interview with Bloomberg TV.
“In the short term I think it will drive even more patient-access instability,” he said. In the medium term, pricing increases will be passed on to payers and ultimately to patients, according to Saynor, who said he doesn’t believe “this is in the interest of patients or health care generally in the US.”
Like rivals Teva Pharmaceutical Industries Ltd. and Viatris Inc., Sandoz copies branded drugs once they lose patent protection, which leads to reduced costs. It manufactures those products largely outside of the US, with plants in Canada and Austria.
The Swiss company said Wednesday that profitable new biosimilar drugs will power sales growth this year, with revenue likely increasing by a mid-single digit percentage in constant currencies.
Sandoz shares surged as much as 7% on optimism about the outlook, which excludes the impact of potential tariffs. The stock has gained almost 50% in the past 12 months.
Tariffs proposed by President Donald Trump are intended to bring production back to the US. But Saynor sees “little point” in investing in increased manufacturing in the country unless there are fundamental changes to how drugs are purchased. The US isn’t an attractive place at the moment for a generics manufacturer to make large capital investments that will take years to deliver, he said.
Sandoz is working to introduce more biosimilars, which are cheaper versions of complex medicines produced from living organisms. More than $140 billion worth of these drugs will lose patent protection by 2030, Bloomberg Intelligence estimates, presenting an opportunity for Sandoz and rivals like Teva and Viatris. They include Merck & Co.’s Keytruda for cancer, one of the world’s top sellers.
The company reported earnings in line with analysts’ estimates for last year. The results were a “strong finish” to 2024, said Barclays’ analyst Emily Field in a note. Biosimilars kindled growth, with sales rising 30%, compared with 2% for traditional generics.
–With assistance from Francine Lacqua.
©2025 Bloomberg L.P.
