Cyclone Trump and the Hormuz crisis, all the risks impacting the pharmaceutical industry

There are two great unknowns that threaten the record numbers of the Italian pharmaceutical industry: the first is the one triggered by Trump practically from the moment he took office in the White House, first with the announcement of maxi tariffs, which have since been scaled down, and then with the current pressure on the big Pharma giants on investments to be brought back overseas and prices to be lowered on the basis of the 'Mfn' (Most Favoured Nation) principle. But the very last heavy unknown, which is still very unpredictable, concerns the blockade of the Strait of Hormuz because if the crisis were to become structural, it could threaten the global pharmaceutical supply chain and in particular the leading production hubs, including Italia: in fact, various medicines - from paracetamol to antibiotics to antidiabetics and oncological drugs - depend as raw materials on petrochemical precursors that are produced and transit right through the Strait of Hormuz. A protracted crisis could jeopardise stocks and thus production, including that of the drugs' packaging and wrapping. For Stefania Pesatori of Qbe Italia, one of the world's leading insurers and reinsurers. "Pharma and technology supply chains are particularly exposed to so-called 'route vulnerability', i.e. dependence on specific strategic logistical and maritime hubs, such as that of Hormuz, as well as trade routes that are sensitive to geopolitical tensions and regional conflicts". In the case of the pharmaceutical sector, 'the most critical element,' notes the expert, 'remains the continuity of the supply chain, even indirectly. If, on the one hand, rising oil, fuel and energy costs tend to be reflected in higher operating costs for all companies, regardless of the sector or the origin of imports, on the other hand, any delays in the availability of raw materials or intermediate components can slow down or even interrupt the operation of production facilities. From an insurance point of view, as in all industries, business interruption is often the main cost item in pharmaceuticals'.

Then there is the issue of the 'most favoured nation' - i.e. 'forcing' Big Pharma to apply in the USA the lowest prices applied by other countries including Italia - with which the USA wants to rebalance the burden of research and development that it has largely borne over the last 25 years. And the first effects are already being seen on the investment front, with at least 100 billion in investments by multinational drug companies expected in the next five years that have moved to the US. Now there is a risk that the cut in drug prices overseas will be paid for by the Old Continent, which could have access to the new therapies even later