Feature

Article

The Ongoing Issues with Tariff and Pricing Strategies: Q&A with Dr. Jay Bhatt

Author(s):

Key Takeaways

  • Tariffs and regulatory changes are driving pharmaceutical companies to adopt scenario planning and secure supply chains, though organizational changes remain limited.
  • A shift towards US-based manufacturing is emerging, with firms investing in new facilities to mitigate regulatory risks and enhance supply chain resilience.
SHOW MORE

Executives are exploring various strategies to prepare for an uncertain pricing environment in the coming months and years.

Jay Bhatt

Dr. Jay Bhatt
Managing Director
Deloitte Center for Health Solutions and Deloitte Health Institute
Deloitte Services LP

The major question that everyone from pharma executives all the way to patients is asking is: how will tariffs and other policies impact drug prices? A recent report from Deloitte suggests that pharma execs could be facing significant operating challenges and transformative changes due to these policies. Dr. Jay Bhatt, managing director of Deloitte’s Center for Health Solutions and the Deloitte Health Institute, spoke with Pharmaceutical Executive about the potential impact of the policies and how pharma companies can adjust their strategies.

How are pharma companies strategizing for tariffs?

Pharmaceutical Executive: What impact will the administration’s policies have on R&D strategies?
Dr. Jay Bhatt: The report did not specifically ask about the administration’s policies but focused on broader regulatory and tariff impacts on R&D strategies.

In response to a rapidly shifting business landscape, many organizations are moving away from simply tracking policy impact, toward actionable next steps. Of the 120 health care and life sciences executives who were surveyed, 73% reported they’ve implemented scenario planning strategies and 64% reported they’ve taken action to secure their supply chains. However, only 13% of US firms and 10% of global firms reported altering their organizational structures.

This indicates that while leaders are starting to move toward more concreate next steps, there is still a possible gap in operational action and an opportunity remains for organizations looking to get ahead of the curve.

PE: How will US manufacturing strategies change?
Bhatt: Life sciences firms are increasingly considering new investments in US-based manufacturing as a response to tariffs and regulatory changes. Strategies include building new facilities, acquiring existing ones, or repurposing current assets to enhance manufacturing agility. According to the survey, 17% of respondents plan to move some manufacturing operations to the US, with 62% of those expecting their new facilities to be operational within five years. This trend suggests a gradual but meaningful shift toward domestic production, aimed at mitigating regulatory risks and improving supply chain resilience. Companies may have also advanced stockpiling strategies in anticipation of possible regulatory changes.

PE: What is the expected commercial impact?
Bhatt: Approximately two-thirds of life sciences leaders anticipate that tariffs and pricing policies will have a moderate to major influence on their long-term commercial strategies. Rather than taking a wait-and-see approach, many commercial teams are proactively modeling business scenarios, particularly around pricing and market access. The survey found that 64% of executives are already incorporating these policies into their strategic planning, with US-based companies about 20% more likely than their European counterparts to engage in active scenario modeling. This highlights a growing emphasis on agility and preparedness in commercial planning.

PE: Which services are under scrutiny and how will companies adjust their strategies?
Bhatt: Services such as clinical trial locations, digital health offerings, and patient support programs are increasingly under review as companies recognize that policy changes can affect more than just physical products. While traditional planning focused on goods, there is now heightened attention on how evolving regulations may impact service-based areas, including digital health and data analytics. The survey shows that 50% of respondents are actively assessing the implications of new policies on these service domains, signaling a broader strategic shift to ensure compliance and maintain competitiveness across a wider range of offerings.

As companies look to adjust their strategies in response to tariffs, new tax regulations, and pricing policies, Deloitte’s survey indicates that they might benefit from an integrated approach that addresses all three at once. While the results clearly show that many life science leaders have engaged in high-level scenario planning and identified category-level priorities, there’s still a reported need for action.

Given most decisions at the corporate level are interdependent, it’s difficult for leaders to address problems in a silo. Effective strategies tend to be those that are regularly updated as new information surfaces and those that allow for cross-functional deployment. Organizations might consider operating in parallel states of readiness and building infrastructure that allows them to act on divergent outcomes, instead of just planning for them. Also having the overarching understanding that there isn’t a linear path to success, allows executives to stay nimble in response to rapidly shifting changes.

Newsletter

Lead with insight with the Pharmaceutical Executive newsletter, featuring strategic analysis, leadership trends, and market intelligence for biopharma decision-makers.

Related Videos
LaShell Robinson, Takeda
Kimberley Chiang, CoverMyMeds
© 2025 MJH Life Sciences

All rights reserved.