President Trump’s tariff hike and drug pricing agenda have injected fresh uncertainty into the pharmaceutical sector. Thermo Fisher Scientific could end up caught in the crossfire.
Analysts warn that drugmakers, dependent on long-term contracts and stable pricing, may hold off on major orders or expansion projects while assessing the latest Trump shake-up. The White House on Sept. 26 announced a 100% levy on branded pharmaceutical imports from companies that don’t build plants in the U.S. and has separately revived efforts to cut drug prices.
For Thermo Fisher, a heavyweight in pharmaceutical laboratory and research services, that caution could hurt its bottom line.
“Pharma companies are a big customer base for Thermo Fisher,” said Vijay Kumar, an analyst at Evercore. “It’s becoming harder and harder for company executives to make big investment decisions until we figure out what the rulebook is.”
The life science giant and laboratory maker supplies the tools and technology that drugmakers, so-called “channel partners,” rely on. Any business uncertainty on the partners’ end can quickly translate into delayed orders, renegotiated contracts, or lower volumes for the company.
Thermo Fisher has struggled to calm investors this year over the Trump administration’s trade tensions with China, one of its biggest markets, and federal cuts to research funding. The stock has slid 2.8% this year, with shares $485 a piece at close on Monday.
Trump’s tariffs are meant to push production back onshore. In practice, most big drugmakers have already committed to expanding domestic facilities, pledging more than $350 billion in U.S. investments through the end of the decade. Its sprawling domestic pharma operations largely protect Thermo Fisher from tariffs, but the same may not hold for its clients.
Trump has also signaled a plan to peg U.S. prices to those in other wealthy countries. That raises the specter of steep discounts on blockbuster products like Ozempic. But what’s got Wall Street particularly spooked is the lack of clarity over which drugs will be targeted, how deep the cuts will be, and how quickly they’ll take effect.
Thermo Fisher has positioned itself as a one-stop shop for the pharmaceutical industry, offering everything from early-stage research tools to clinical trial logistics.
Even so, the company has been bracing all year for headwinds and sudden shifts in Trump’s tariff policy. In April, the company warned that U.S.-China duties would shave $400 million off 2025 revenue. To counter that, it announced a $2 billion push into domestic manufacturing and research and development over four years, with $1.5 billion directed at expanding U.S. production capacity.
Thermo Fisher announced in July that the tariff outlook had improved enough to lift the low end of its profit forecast. The company has stressed that trade policy remains fluid. It could not be reached for comment at press time. Until Washington clarifies the regulatory rulebook for pharma, Thermo Fisher’s enviable market position could be shaken by Trump’s potentially volatile mix of tariffs and drug-price crackdowns.