Johnson & Johnson Warns U.S. Pharma Tariffs Could Disrupt Drug Supply

Johnson & Johnson has raised concerns that potential U.S. tariffs on pharmaceuticals could lead to critical drug shortages, as policymakers weigh broader trade actions to promote domestic manufacturing.

Joaquin Duato, CEO of the global healthcare giant, warned on Tuesday that disrupting long-established pharmaceutical supply chains with new tariffs would pose a risk to patient access and health system stability.

“There’s a reason why pharmaceutical tariffs are zero,” Duato told analysts.
“Tariffs can create disruptions in the supply chain, leading to shortages.”

While medicines were excluded from a recent round of tariffs introduced by the U.S. government, the administration has signaled it is re-evaluating that position. Washington is reportedly considering trade penalties as a tool to encourage pharmaceutical production within the United States.

Currently, pharmaceuticals are exempt from tariffs under the 1994 World Trade Organization (WTO) agreement—an arrangement designed to safeguard the global flow of critical medical goods.

Medical Devices Already Impacted

Unlike pharmaceuticals, medical technologies such as surgical robots—manufactured by Johnson & Johnson—have already been affected by the newly imposed U.S. tariffs.

Duato argued that tariff-based strategies are not the optimal path to strengthening the domestic manufacturing base.

“If the goal is to build manufacturing capacity in the U.S., both in medtech and pharma, the most effective answer is not tariffs but tax policy,” he said.

In March, the company announced a $55 billion investment plan to expand its U.S.-based manufacturing over the next four years—marking a 25% increase compared to the prior investment period.

White House Launches Supply Chain Probe

On Monday, the Biden administration revealed it had opened a national security investigation into America’s reliance on imported medicines. The inquiry, which began on April 1, will proceed with a 21-day consultation period.

Duato responded to the announcement by emphasizing the need for collaboration between government and industry.

“It’s important for healthcare companies to work with the administration to mitigate some of the vulnerabilities that exist in our healthcare supply chain,” he noted.

J&J’s Chief Financial Officer Joe Wolk echoed a tone of caution, stating that the company aims “to be deferential to the administration and their process.”

Growing Industry Concern

Until recently, most pharmaceutical companies have avoided public opposition to the evolving tariff framework, opting instead for private discussions with federal agencies. However, industry leaders are beginning to speak out.

Last week, AstraZeneca Chair Michel Demaré warned that tariff policies could “harm patients, burden health systems, and restrict health equity.”

Despite the uncertainty, Johnson & Johnson maintained its financial outlook. In quarterly results published Tuesday, the company reaffirmed its full-year adjusted diluted earnings per share forecast of $10.50 to $10.70.

First-quarter sales reached $21.9 billion, a 2.4% increase year-on-year, surpassing analyst expectations of $21.6 billion. The company reported approximately $400 million in costs, largely attributed to tariffs on its medical devices division.

As the U.S. government intensifies its review of pharmaceutical trade policy, the tension between national security interests and the continuity of healthcare delivery is becoming more pronounced. Industry stakeholders warn that ill-considered tariffs could do more harm than good, especially for patients depending on uninterrupted access to life-saving treatments.

Stay tuned to finance news on The Horizons Times for continued coverage on U.S. healthcare and trade policy developments.