Talking Tax Pharmaceutical Companies Navigate Transfer Pricing as Tariffs Loom
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Aug 15, 2025 Pharmaceutical companies are facing a storm as they adapt to looming tariffs and the complexities of transfer pricing. The discussion highlights how these tariffs could revolutionize where drugs are manufactured and where intellectual property resides. Companies are exploring varied strategies to navigate the shifting landscape, while concerns about drug pricing and national security arise. The podcast concludes with insights into the future implications of these trade policies and their potential impact on the pharmaceutical industry.
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Tariff Threats Break Longstanding Pharma Norms
- Pharma historically operated under a global norm of no tariffs on medicines, making tariff threats a major policy shift.
- The industry felt skepticism and concern because tariffs contradict long-standing WTO-based health policy norms.
Pause Before Changing Transfer Pricing
- Don't react to the first headline; wait for clarity before restructuring transfer pricing or supply chains.
- Companies should take a breath and avoid knee-jerk moves until policy details firm up.
Transfer Pricing Parallels Physical Supply Chains
- Transfer pricing acts like a financial chain that runs alongside the physical supply chain and drives where IP is domiciled.
- Policy talks have so far targeted tax rules, not direct tariff changes to transfer-pricing arrangements.