Hikma Pharmaceuticals PLC (LSE:HIK, OTC:HKMPF) and Fresenius Medical Care (NYSE:FMS) could emerge as relative winners from Donald Trump's proposed tariffs on generic drugs because of their extensive US manufacturing operations, according to Citi.
The US president this week announced plans to impose a 100% tariff on imported generic medicines from August 2028, rising to 200% a year later.
Citi analyst Veronika Dubajova said details about the scope and implementation remained sparse, but the policy appeared likely to favour manufacturers that already produce most of their US-bound medicines domestically.
More than 75% of Hikma's US sales volumes are manufactured in the country, including 90%-95% of non-injectable products and around 60% of injectables.
Most of Hikma's remaining overseas manufacturing takes place in Portugal, which Citi noted has a trade agreement with the US.
This should leave the London-listed drugmaker better protected than generic manufacturers relying heavily on factories in India.
Fresenius's Kabi division is similarly positioned, producing more than 70% of its US volumes domestically. For products manufactured elsewhere, the company sources high-value active ingredients in the US, potentially reducing their exposure to the proposed levy.
The tariff plans could therefore widen the competitive advantage held by manufacturers with established American production and encourage further investment in domestic capacity.
However, the long implementation period and lack of detail mean the financial impact remains difficult to quantify.
Fresenius reports second-quarter results on 5 August, followed by Hikma's first-half figures on 6 August.
