100% Pharmaceutical Tariffs Are Here. Time to Buy These 3 Drugmakers

Starting today, the U.S. imposed 100% tariffs on imports of branded or patented pharmaceutical products that President Trump announced last week. This sweeping measure targets foreign-made drugs to push manufacturers toward U.S. production and bolster domestic supply chains.

Covered items include finished branded medicines and patented therapies from abroad, hitting suppliers in Asia, Europe, and beyond — though trade deals with the EU and Japan limit some exposure there. Excluded are generics, unbranded drugs, and — crucially — products from companies actively building U.S. facilities, defined as those with construction started or ground broken. This exemption rewards firms investing stateside.

The tariffs coincide with pricing pressures, but a landmark deal sets pharma apart. Yesterday, Pfizer (NYSE:PFE) reached a voluntary agreement with the government to align U.S. prices for new drugs with the lowest in developed nations, including most-favored-nation rates for Medicaid via a new TrumpRx.gov site. This provides tariff certainty for three years if Pfizer boosts U.S. manufacturing, shielding it from import duties while curbing price hikes.

Experts note this framework could stabilize costs without broad disruptions, as stockpiling and exemptions soften impacts. Pharma stocks reacted positively to the news, broadly climbing with the VanEck Pharmaceutical ETF (NYSEARCA:PPH) up 1.2% amid relief over the deal and limited tariff fallout for domestic-heavy players.

The new tariff regime tilts the field toward U.S.-centric drugmakers, making three below clear buys for growth ahead.

Pfizer (PFE)

Pfizer stands out as a tariff winner, thanks to its fresh government pact. The agreement exempts its products from the 100% levy for three years, provided it ramps U.S. investments — like the $70 billion pledged for R&D and domestic plants.

With 11 manufacturing sites and two distribution centers located in nine U.S. states, Pfizer faces limited import hits, unlike foreign rivals. This setup lets it focus on volume growth without cost spikes, especially as tariffs squeeze competitors’ pricing power.

Beyond tariffs, Pfizer’s pipeline drives expansion. Its oncology lineup, including Padcev and Talzenna, posted 30% sales jumps in 2024, targeting a $100 billion market by 2030. RSV vaccine Abrysvo and heart drug Vyndaqel add stable revenue, with combined 2025 forecasts at $10 billion. Pfizer also eyes $20 billion in annual synergies by 2027 following its acquisition of Seagen in 2023.

Trading at a forward P/E of 8 — less than half the sector average — PFE stock is undervalued despite relatively flat earnings growth predicted through 2030. A dividend yield of 6.7%, backed by $16 billion in trailing free cash flow, offers cushion as earnings get back on track. In a tariff world favoring locals, Pfizer’s scale positions it for a steady rise.

Eli Lilly (LLY)

Eli Lilly (NYSE:LLY) should thrive under the new tariffs, planning to more than double U.S. manufacturing investment since 2020 to exceed $50 billion — including four new sites in Indiana and North Carolina.

This domestic focus exempts its key drugs from duties, shielding GLP-1 blockbusters like Mounjaro and Zepbound from foreign cost pressures. Tariffs on imports like Novo Nordisk‘s (NYSE:NVO) Wegovy could boost Lilly’s share, as U.S. patients shift to tariff-free alternatives. Mounjaro’s dominance in diabetes and obesity, paired with Zepbound’s weight-loss appeal, positions Lilly to capture a growing $150 billion market by 2030.

Lilly’s growth engine is obesity and diabetes, where Mounjaro sales hit $12 billion in 2024, up 124%. Zepbound follows at almost $5 billion, with combined projections reaching $61.5 billion by 2030. Oral weight-loss candidate orforglipron, in phase 3, could launch in 2026 as a pill rivaling injectables, potentially adding $10 billion annually. Alzheimer’s drug Kisunla adds $2 billion potential yearly, while donanemab’s approval strengthens its neuro portfolio.

With a forward P/E of 25, LLY’s 25% revenue CAGR through 2028 makes the stock a bargain fueled by 20 pipeline assets, including oncology and immunology trials. Tariffs amplify Lilly’s U.S. edge, and it should be a core holding for decade-long gains.

AbbVie (ABBV)

AbbVie (NYSE:ABBV) will also weather tariffs due to its U.S.-heavy operations and $10 billion manufacturing expansion over the next decade, including new facilities in Illinois and Ohio. With Skyrizi and Rinvoq produced domestically, the firm dodges most import duties as a substantial portion of its facilities are U.S.-based. Management calls tariff risks “in line with industry” but minimal, given its Ireland hub for Botox and 600 global sites.

This resilience lets AbbVie prioritize immunology over supply chain worries, while tariff exemptions bolster its competitive pricing.

Humira’s biosimilar market erosion is easing, with 2024 sales at $9 billion versus $20 billion peak, offset by Skyrizi’s 71% and Rinvoq’s 57% surges to $14 billion combined. Projections for them to hit $31 billion by 2027 show ongoing strength.

Pipeline stars like TL1A and IL-1 inhibitors eye 2026 data releases and target $10 billion markets in psoriasis and Crohn’s disease. Aesthetics, with Botox, and oncology, with Imbruvica, add $8 billion in revenue annually, as Venclexta gains traction.

At a forward P/E of 16, ABBV stock is a value play with a dividend yielding 3.7% and a 52-year track record for raising the payout. Tariffs just reinforce AbbVie’s domestic moat, priming it for 10% annual returns.

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