Donald Trump’s pharmaceutical tariff to have | Australian Markets

Investment bank UBS expects Donald Trump’s tariff risk on prescription drugs to have “limited” influence on biotech giant CSL, particularly if plasma merchandise are excluded.

While the potential tariff fee of between 20 per cent and 200 per cent on pharmaceutical imports remained unsure, UBS analyst Marcus Curley stated the initial hit on CSL ought to be restricted to single-digit earnings influence, with plasma exclusions possible.

CSL — Australia’s third-biggest company by market capitalisation at simply over $120 billion — collects and processes human plasma to develop life-saving therapies and medicines.

The majority of pharmaceutical merchandise exported to the US are plasma proteins, resembling immunoglobulins, albumins and clotting components.

The blood for these merchandise is extracted from American donors by way of CSL’s US subsidiaries and transported to its Broadmeadows plant in Melbourne for processing. The proteins are separated by way of a course of referred to as fractionation after which transported back to the US for sale.

Because of this, Mr Curley stated “CSL’s plasma products are well positioned for exclusion from US tariffs”.

“If not, CSL has flagged its ability to accelerate the development of a US fractionation facility as part of an extended grace period deal of about five years.”