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Eyes On Pharma Blog 

US BioPharma reacts to "BBB" and Potential Import Tax timelines.

  • Writer: Jana Chisholm
    Jana Chisholm
  • Jul 27
  • 7 min read
multicolored capsules in clear packaging

 

 This month we've had Eyes On The BBB and potential timing and impact on the BioPharma sector. This is a dynamic area, with many different news bytes daily, let us know what you'v e seen and what sources you are following.



BioPharma Taxes & Trump's Big Beautiful Bill (BBB)


President Trump has reaffirmed his promise to fast-track the implementation of drug taxes. Last week, the president raised the possibility of imposing a 200% tax on pharmaceuticals manufactured abroad during a cabinet meeting. He added that he intends to allow manufacturers a minimum of one year to relocate their operations to the United States. The 200% figure and the tiered method are not novel ideas. Following Trump’s declaration, the share prices of major pharmaceutical companies remained mostly steady.

 

Trump proposed a 200% import tax rate during a March meeting with Micheál Martin, complaining that the European nation has attracted U.S. pharmaceutical companies with a low corporate tax rate.

 

In terms of monetary values, Ireland is the largest exporter of pharmaceutical items to the United States. Analysts estimate that in 2024, the United States imported around $50 billion worth of pharmaceuticals from Ireland and $8 billion from China. The President has previously hinted at the possibility of a grace period. Trump announced at an Invest in America rally in April that he would wait to build a tariff wall on biopharma businesses.

 

The exact date when the pharmaceutical tariffs will take effect and the countdown for the grace period will begin is not yet known. Howard Lutnick, the Secretary of Commerce, stated that information regarding pharmaceutical tariffs will be released at the end of the month.

 

According to Lutnick, his department will conclude by the end of the month what is known as a Section 232 examination into whether pharmaceutical imports pose a national security risk to the United States. The investigation’s findings could direct and support any protectionist measures the administration decides to implement.

 

Trump promised to clarify tariffs on pharmaceuticals over the next two weeks as he signed an executive order on May 5th, instructing the FDA to lower regulatory barriers for American drug manufacturers. Prior to that, in April, Lutnick stated that these measures would be implemented within the following month or two.

 

During a return flight from the G7 meeting in Canada last month, Trump informed reporters that pharmaceutical trade penalties would be implemented shortly. 


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Trump’s ‘Big, Beautiful Bill’ gives pharma a $5 billion payday. The $3.3 trillion domestic agenda package signed into law by House Republicans last week includes a big win for pharmaceutical firms that will cost taxpayers about $5 billion over the next ten years.

 

The bill allows manufacturers to maintain higher prices for drugs that treat some rare diseases by extending exclusions from Medicare’s drug price negotiating scheme. According to the Congressional Budget Office, through to the year 2034, this adjustment will result in a $5 billion decrease in government savings. Costly medications that treat a single rare condition affecting fewer than 200,000 Americans are released from Medicare price negotiations under the existing rules. This strategy, according to pharmaceutical companies, deterred them from applying for approval of additional indications.

 

This is the biggest modification to the Medicare negotiating program since its establishment by the Democrats in 2022. Beginning in 2028, the exemptions will be valid for the third round of pricing negotiations. The new regulations could save a number of medications that are currently undergoing price reductions, such as Imbruvica and Pomalyst, for rare cancers.


As part of Trump’s larger legislative package, which also includes tax cuts, boosts in defense spending, and major cuts to government safety net programs, the bill passed mainly along party lines. The proposal was criticized by Democrats for burdening poor Americans while favoring the interests of the rich.


According to analysts, the present measure would cause 11.8 million people to lose health insurance by 2034, with Medicaid coverage being lost for the bulk of those individuals. However, the ramifications can be considerably more significant. Medicaid estimates that 17 million individuals may lose their health insurance as a result of Trump’s bill and other policy changes. 


The potential further changes could transpire as rules that would significantly restrict access to coverage in the Affordable Care Act Marketplace and expiring enhanced ACA tax credits.


Government data indicates that 72 million Americans, or around one-fifth of the country’s entire population, are currently enrolled in Medicaid. Most nursing facility residents receive their principal payment from Medicaid, which also covers around 40% of all newborns.


The Trump administration and its backers maintain that the bill’s provisions are intended to prevent fraud, abuse, and waste. According to Democrats, they violate the president’s repeated pledges to keep the Medicaid program unaltered. Throughout negotiations in both chambers, Medicaid has been one of the most contentious topics, and some House Republicans have voiced concerns about the extent of the cuts. According to the Nurses Association, the cuts may result in the closure of rural hospitals and health centers and the loss of jobs for nurses and other medical personnel.


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 The pharmaceutical behemoth Merck is purchasing Verona Pharma for approximately $10 billion, one year after the company’s ground-breaking treatment for chronic obstructive pulmonary disease (COPD) was approved by regulators.


Since its August 2024 introduction, Verona, with its U.S. headquarters in Raleigh, NC, has achieved significant success with its new medication, Ohtuvayre (ensifentrine). In well over two decades, this is the first novel inhalation medication for COPD to be introduced to the American market.

 

The medication will broaden Merck’s range of cardiopulmonary therapies. Analysts predict that purchasing Verona, Merck’s largest acquisition since 2021, will lessen the impact of the company losing the patent protection for Keytruda, its best-selling cancer medication, in 2028.

 

A Merck subsidiary would pay $107 for each of Verona’s American Depositary Receipts, the companies announced in a joint release, valuing the deal at almost $10 billion. Depending on regulatory approval, the firms anticipate closing the merger in the fourth quarter of this year.

 

Since establishing its U.S. headquarters in Raleigh in 2020, Verona has been expanding its Triangle personnel. By the end of 2020, the company employed 209 full-time staff members, and this year, it intends to expand its sales force. With its operations in Durham, including a $1 billion vaccine manufacturing plant that opened in March, Merck already has a significant presence in RTP. A 500,000-square-foot manufacturing facility in Wilson and a biotechnology learning center with North Carolina A&T State University in Greensboro are among the company’s North Carolina facilities.

 

In June 2024, Ohtuvarye received approval from the U.S. Food and Drug Administration to treat COPD. According to the company’s most recent earnings statement, the drug’s launch drove a 95% rise in Verona’s net sales in the first quarter when compared to the fourth quarter of 2024. More than 25,000 prescriptions for Ohtuvarye had been filled, according to Verona, whose stock is traded on the Nasdaq.

 

Phosphodiesterase 3 and 4 (PDE3 and PDE4) are two enzymes involved in lung and heart function that Ohtuvarye selectively inhibits. The lungs’ airways open more readily when these enzymes are blocked, a process known as bronchodilation.

 

Additionally, Verona has started Ohtuvarye Phase 2 clinical trials as a therapy for bronchiectasis that is not caused by cystic fibrosis. Currently, there are no FDA-approved treatments for this condition.


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This week, the FDA unexpectedly posted almost 200 drug rejection letters, giving the public a detailed look at the intense debates that determine whether a medication will reach the market. The FDA stated that publishing the complete response letters (CRLs) was a component of the agency’s modernization and transparency initiatives. The FDA’s document drop provided a chance to compare agency documents and public statements from pharmaceutical companies, as we have so far had to rely on the companies themselves to convey the FDA’s rejection rationale in the moments following the publication of the judgements.

 

In 2023, the FDA pointed out that N-acetylcysteine, a long-approved ingredient in Legubeti, has an unpleasant odor that could compromise the tolerance of oral intake when evaluating a request by Galephar Pharmaceutical to approve Legubeti as an oral solution for paracetamol overdose. The FDA subsequently authorized Legubeti in 2024.

 

It was well known that an increase in cardiovascular risks found in two studies was one of the reasons why the FDA rejected Amgen and UCB’s application for Evenity (romosozumab) as a therapy for postmenopausal women with osteoporosis in 2017.

 

Amgen was less explicit when discussing the feedback it got in the CRL, merely mentioning the agency’s desire for further safety and efficacy data from its different phase 3 studies.

 

The FDA did, in fact, focus on the cardiovascular risks when describing the reasons for the rejection, as the CRL itself attests to. It specifically cited phase 3 Arch study preliminary results that indicated a higher incidence of cardiovascular serious adverse events with romosozumab compared to alendronate in women with postmenopausal osteoporosis.

 

With a boxed warning for the risk of heart attack, stroke, and cardiovascular death, Evenity was finally approved in 2019.

 

In 2022, the FDA rejected Ngenla (somatrogon), a possible treatment for pediatric growth hormone insufficiency, which was a surprise blow to Pfizer’s rare disease strategy. Given that the medication had previously received approval in Canada, Japan, and Australia, the CRL was unexpected, and Pfizer’s release provided no explanation for the agency’s choice.

 

But according to the FDA’s statement, one of the main factors that led to the agency’s conclusion was a single participant in a phase 3 open-label experiment who experienced a worrying decrease in annualized height velocity (AHV), or delayed growth.

 

The FDA asked Pfizer to reassure them that the anti-drug antibody formation caused by somatrogon was not expected to interfere with other recommended human growth hormone formulations or affect long-term growth attained with somatrogon.

 

As the pharmaceutical company subsequently obtained clearance of Ngenla the following year, it is likely that the FDA was reassured by the information Pfizer submitted in its resubmission.

 

The CRLs also identified deficiencies by contract development and manufacturing organizations (CDMOs), which are frequently left unidentified in FDA and business correspondence.

 

Checkpoint Therapeutics blamed problems found after an examination of a third-party contract manufacturing facility for the FDA’s decision to reject its cancer asset, cosibelimab, in late 2023.

 

According to the company’s CRL, Samsung Biologics was that manufacturer. After the FDA identified issues during an inspection of one of Samsung Bio’s production sites in Incheon, South Korea, the company submitted a remediation plan. nonetheless, the FDA acknowledged in its full response letter to Checkpoint that not all of the issues had been adequately addressed. Cosibelimab, a PD-L1 inhibitor, was finally approved by the FDA last December as a novel treatment for specific forms of cutaneous squamous cell carcinoma.


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