New 100% tariffs on Australian pharmaceuticals will not significantly affect the nation’s largest drug company, CSL Ltd (ASX: CSL), the company said on Tuesday.
New trade war front
US President Donald Trump last week announced that the US would impose tariffs of up to 100% on imported drugs, however, there were carve-outs for companies that had plans to move manufacturing to the US.
There were also tariff caps on certain countries with trade deals with the US, including Japan, South Korea, Switzerland, and the European Union.
CSL said in a statement to the ASX on Tuesday that it had taken note of the new tariff announcement, but said that it was not anticipating a large impact.
The company said:
CSL is working through the details of the Proclamation, but the initial view is that most of CSL’s U.S. product sales will not be subject to tariffs. CSL is pleased the U.S. Administration has recognised the unique nature of plasma-derived therapies under the Proclamation. This is consistent with the longstanding approach of special policy accommodations to ensure patient access to these life-saving therapies. CSL’s U.S. plasma therapies are derived entirely from U.S. sourced plasma. CSL continues to invest in manufacturing and job creation in the U.S., recently announcing plans to spend $1.5 billion to expand its plasma therapy manufacturing capabilities in Illinois.
CSL said the primary product sold by its Seqirus division in the US was Fluad, which was made in the United Kingdom, where the tariff is currently 10%, with expectations that it would be reduced to zero.
Mayne also in the clear
Relative minnow Mayne Pharma Ltd (ASX: MYX) also said the new tariffs were expected to have “no material impact” on the company’s FY27 earnings profile.
Mayne Pharma said there was no tariff to be applied to generic medicines, and there would only be a minimal tariff applied to its women’s health portfolio.
It also manufactures branded dermatology products in the US, and hence no tariff would apply.
The company said:
For the Company’s Women’s Health segment, Mayne Pharma believes the tariffs would not apply to the contraceptives in the branded portfolio and would not have a material effect on the menopause products as only one active pharmaceutical ingredient (API) is sourced internationally, and that API is sourced from a territory under an existing trade deal with the US and subject to a lower tariff.
CSL shares were 2.1% higher in early trade at $141.94, while Mayne shares were 2.6% higher at $2.39.
The post What’s the impact of US tariffs on Aussie drugmakers CSL and Mayne Pharma? appeared first on The Motley Fool Australia.
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Motley Fool contributor Cameron England has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.