MERCK HIT HARD: $200 MILLION TARIFF NIGHTMARE LOOMS!
Merck is sounding the alarm bells as it braces for a staggering $200 million blow from tariffs imposed during the Trump era! Executives revealed their grim forecast during a shocking April 24 earnings call, slashing their profit predictions for 2025 from a promising $9.03 per share down to a murky $8.97!
Just a week ago, the pharmaceutical giant Johnson & Johnson dropped its own bombshell, predicting a mind-blowing $400 million in tariff-related costs! What’s going on in the world of big pharma?
TROUBLES IN THE AIR!
Chairman and CEO Robert Davis painted a dismal picture, revealing that the primary hit will come from existing tariffs straining relationships with China, Canada, and Mexico. But don’t expect to see Davis sweating bullets just yet!
TARIF-IC TURMOIL AHEAD?
The shadow of potential new tariffs hangs heavy following the Department of Commerce’s jaw-dropping announcement on April 14, sparking a national security investigation into pharmaceutical imports. Yet, Davis reassured investors, claiming Merck is more than ready to tackle any impending challenges. He declared, “Our global supply chain is in a strong position to handle potential impacts!”
MANUFACTURING STRATEGIES ON HIGH ALERT!
So, how is Merck planning to combat this looming crisis? Davis revealed they’ve already pinpointed tactics to “reposition” their manufacturing game! This includes tweaking plant priorities and ramping up both external and internal manufacturing!
Since 2018, Merck hasn’t been sitting idle. They’ve poured a jaw-dropping $12 billion into US manufacturing, with plans for an additional $9 billion by 2028! Davis claimed these bold moves mean more products for US patients and exciting new export opportunities!
NOT JUST A MERCK PROBLEM!
Merck isn’t alone in this financial tango! Johnson & Johnson is set to invest an astronomical $55 billion in US manufacturing over the next four years, while Eli Lilly is revving up with a commitment of at least $27 billion to launch four new plants in the next five years!
All of these pharmaceutical titans are ramping up their US investments, crediting the 2018 Tax Cut and Jobs Act for their manufacturing booms. “Tax policy is a real game-changer for boosting US manufacturing capacity!” declared J&J CEO Joaquin Duato.
FAST FACTS: MARCK’S Q1 SALES TAKE A HIT!
Merck revealed its worldwide sales for Q1 2025 were $15.5 billion, a disheartening 2% drop compared to last year. Even with lowered profit expectations, they are still projecting an impressive $64.1 billion to $65.6 billion in sales for the year!
But wait, there’s more: Merck is on high alert for its blockbuster cancer drug, Keytruda, which currently accounts for over 45% of its global sales, facing patent expiration in 2028. Keytruda’s sales rose 4% to $7.2 billion, but analysts are warning that this was just a hair’s breadth below expectations!
Stay tuned as Merck and the Big Pharma elite navigate through this tumultuous landscape!
photo credit: fortune.com
