Pfizer, Amgen, Johnson & Johnson among early losers on Wall Street as investors brace for policy shocks
Pharmaceutical giants took a sharp hit on April 9 as U.S. equity markets opened to a wave of selling triggered by renewed tariff anxieties — this time, targeting Big Pharma. The slump came amid widespread fears that former President Donald Trump’s looming policy announcements could involve sweeping tariffs on pharmaceutical imports, a move that would reverberate across the global drug supply chain.
Investors didn’t wait for specifics. They voted with their feet.
Shares of industry heavyweights including Pfizer, Amgen, Johnson & Johnson, Eli Lilly & Co., and Merck & Co. opened significantly lower, dragging down the broader health care sector in early trading. The S&P 500 and Nasdaq both dipped at the open before regaining footing, but pharma remained in the red as the session progressed.
Fear Over Facts — But the Market Isn’t Taking Chances
At 10:11 a.m. EDT, Pfizer Inc. was trading 2.56% lower at $21.31, following an early dip to $21.11 — a sharp decline from Tuesday’s $21.84 close. Amgen fell 2.48% to $273.23, while Johnson & Johnson was down 2.37% at $146.45 after a low open of $142.20.
The real gut-punch, however, came for Eli Lilly & Co. and Merck. Lilly was down over 3% at $701.25, giving up a significant chunk of recent gains. Merck followed suit, sliding to $76.61 — down more than 3% from its previous close.
Whispers of impending trade restrictions — and Trump’s track record of disruptive policy shifts — have reignited fears of a pharmaceutical trade war. If tariffs on drug imports are reintroduced or expanded, companies with complex global supply chains, particularly those relying on ingredients and manufacturing hubs in Asia and Europe, could face significant cost pressures.
“Trump doesn’t need to spell it out in a white paper. The market knows what he’s capable of,” said a New York-based hedge fund manager who holds positions in Amgen and Merck. “Even the hint of tariffs is enough to shake confidence.”
Timing, Politics, and the Pharmaceutical Chessboard
The broader context: Trump has been ramping up rhetoric on protecting American jobs and manufacturing — a central theme of his 2024 campaign and one he’s likely to double down on ahead of the 2025 policy season. While trade war concerns have mostly hovered around tech and semiconductors in recent months, pharma has quietly emerged as the next potential flashpoint.
A Trump campaign advisor, speaking to Bloomberg under condition of anonymity, said pharmaceutical tariffs “are not off the table” and that the former president is exploring ways to “bring drug manufacturing back to U.S. soil.”
Whether that materializes into action is still unclear. But for traders and long-term investors alike, the risk is real — and immediate.
What’s at Stake for Big Pharma?
The pharmaceutical industry’s dependence on global supply chains is no secret. Everything from active pharmaceutical ingredients (APIs) to finished formulations are routinely sourced from China, India, and Europe. Tariffs on any component of this web could increase production costs, disrupt inventory flows, and ultimately pinch margins.
“Tariffs on APIs could raise costs by 10–15% in the near term,” said Tanvi Iyer, an equity analyst with Kotak Institutional Equities. “For generics players, that’s significant. Even for big players like Pfizer or Johnson & Johnson, it adds up fast.”
Companies may try to pass those costs on to consumers, but political optics around drug prices make that a difficult sell — especially in an election year. The result? Squeezed margins and tougher earnings calls ahead.
The Markets at Large: A Tale of Diverging Sentiment
While pharma stocks suffered, broader market indices showed signs of resilience by mid-morning. The Dow Jones Industrial Average (DJIA) opened 0.68% lower at 37,387.91 points, only to claw back into positive territory, trading 0.14% higher at 37,708.
The S&P 500 followed a similar arc, opening down 0.35% at 4,965.28 before rallying to 0.52% higher later in the session. Nasdaq, heavily weighted with tech stocks less affected by tariff talk (at least for now), led the charge upward.
Still, the pharma selloff pulled down healthcare as a sector, with ETFs like XLV trading lower on the day and dragging on momentum.
Investors Eye the Next Move — and Possible Bargains
As the dust settles, institutional investors are re-evaluating their exposure to healthcare stocks. Some see this as a buying opportunity — a temporary panic that will stabilize once policy clarity emerges. Others are more cautious, pointing to Trump’s unpredictability and the industry’s vulnerability to geopolitical shifts.
“Pharma’s fundamentals haven’t changed,” said Lauren McBride, a portfolio strategist at a Boston-based investment firm. “But political risk is back, and that always means volatility.”
Meanwhile, traders are already looking ahead to earnings season — where the real damage, or lack thereof, will be revealed.
