CEO of Eli Lilly and Company David Ricks speaks at the Economic Club of New York on March 12, 2024 in New York City.
Spencer Platt | Getty Images
Eli Lilly CEO Dave Ricks on Thursday said the drugmaker can help “respond” to national security concerns around cheaper essential medicines as pharmaceutical-specific tariffs loom.
The Trump administration has opened a Section 232 investigation into how importing certain drugs into the U.S. affects national security – a move widely seen as a prelude to initiating tariffs on pharmaceuticals. It is unclear what those levies will look like and whether they will target branded or older generic drugs, the latter of which are largely made overseas in countries like India and China.
“Bringing that capacity back, so in case of emergency, we have the stock, we have the supply – that’s a valid thing,” Ricks said in an interview with CNBC, referring to those older drugs. He spoke after Eli Lilly reported first-quarter earnings and 2025 guidance, which did not include estimated effects of the potential pharmaceutical tariffs.
He said national security concerns around those medications are “valid.”
But he added: “Do I think tariffs are the answer to that? I’m not so sure personally.”
“We would be happy to talk to this administration or national security people about how we could respond to such a crisis,” he said. “We have capacities to bring to bear there, and we’re happy to help the country if we’re in need.”
Older generic drugs account for about 90% of the medicines prescribed in the U.S. Many are critical for hospital care, including antibiotics and vasopressors, or medications that raise blood pressure.
Ricks noted that those essential drugs are “not easy to make, but they’re cheap, and they’ve been driven out of our country due to cost and other damaging policies.”
However, some health experts previously told CNBC that tariffs on generic drugs, which have far lower profit margins than branded medications, could force some generic drugmakers to leave the U.S. market altogether. That could lead to or exacerbate shortages of certain generic drugs in the U.S., such as sterile injectable drugs commonly used in hospitals.
Rick’s comments come as drugmakers brace for President Donald Trump’s planned pharmaceutical tariffs, which aim to boost domestic manufacturing. Those tariff threats are already fueling a new wave of U.S. manufacturing investments from the pharmaceutical industry.
That includes Eli Lilly, which in February announced it will invest at least $27 billion to build four new production sites in the U.S.
On Thursday, Ricks said tariffs may not be needed after the industry’s moves to reshore manufacturing.
“I think that actually the threat of tariffs is already bringing back critical supply chains into important industries, chips and pharma,” Ricks said. “So do we need to enact [tariffs?] I’m not so sure.”
He added that Eli Lilly wants to see permanent lower tax rates in the U.S., particularly 15% for domestic production. Ricks said lower taxes drove many drugmakers to manufacture in “low-tax islands like Ireland, Singapore and in Switzerland, and that can come back if there’s an economic incentive.”
That echoes the sentiment of Pfizer CEO Albert Bourla’s comments on Tuesday. Though Bourla argued that uncertainty around tariffs is deterring the company from making U.S. investments in manufacturing and research and development.
