Q&A: Supply Chain Fallout From Iran War, Tariff Uncertainty

Though a temporary truce was reportedly agreed upon today, there’s no doubt the Iran war has upended global supply chain management significantly, particularly for time- and temperature-critical transport sectors such as pharmaceuticals. In the below exclusive Q&A with Pharmaceutical Executive, Dan Bell, chief strategy officer for Marken UPS Healthcare Precision Logistics, shares insights on how biopharma manufacturers and their supply chain partners are navigating the fallout so far — from airspace restrictions to surging fuel costs and constrained shipping capacity.

Against the backdrop of already converging geopolitical tensions and regulatory uncertainty, Bell also discusses the impact of fluctuating US tariff enforcement on supply chain strategy and operations. That includes ramifications of the recent landmark Supreme Court decision over executive trade power and the resulting fragmented and confusing landscape for US customs compliance.

Woven together, these developments point to an increasingly high-stakes environment, where biopharma companies are rethinking everything from clinical trial geography and launch strategies to cost modeling, regulatory adherence, and long-term supply chain design.

Bell, who joined legacy Marken in 2003, is a licensed US customs broker and a certified customs specialist with more than 26 years of experience in the life science logistics and temperature-control fields.

Pharm Exec: Can you provide some specific context on how the Iran war is directly affecting pharma shipping and transport?

Bell: Due to the war, there are places in the region that can no longer be safely reached, especially by air. Airlines are now operating to go around a no-fly zone. Since the Strait of Hormuz is closed, the price of fuel will continue to skyrocket (editor’s note: this response was made prior to today’s two-week ceasefire; there are conflicting reports that after Iran initially confirmed a partial, limited reopening, it has closed the strait again in response to Israeli attacks on Lebanon).

It impacts pharma because air freight is its preferred mode of travel; shipments reach their destination faster and on an exact schedule. Oftentimes, the ocean may not be a good fit.

There is also a significant impact on the cost of the global manufacturing supply chain. Pharmaceuticals are made in multiple countries in various stages, all of which require transportation, which is being impacted by capacity constraints, fuel surcharges, and security arising as a result of the conflict.

Pharm Exec: How are pharma manufacturers/developers and their partners preparing for supply shock resulting from the war?

Bell: Marken has been busy assisting customers. At this moment, companies are reviewing their contingencies, business continuity plans, drug supply networks, and capacity. Many are also securing stock of key ingredients, reviewing capacity within the supply chain for carriers, and revisiting their costs. Marken has been busy assisting in these endeavors, and dealing with disruption has been a regular part of our everyday business for decades.

Pharm Exec: What might be some of the more major downstream implications?

Bell: The downstream implications of the tariffs and the war in Iran are numerous. The biggest is the cost impact. There are also the delays in clinical trials and what this will do to research, or lack thereof.

Another consideration is supply shortages. Even for a lot of things most don’t consider, like ancillary materials for clinical trials. For example, when aluminum costs rise, other things are going to go up too, such as packaging. Think about costs of deriving products and local transportation infrastructure. These are all going to go up. Companies will see an increase in costs across the board.

Pharm Exec: Amid the Learning Resources, Inc. v. Trump ruling, how are pharma logistics teams managing tariff uncertainty and potential refunds?

Bell: So basically, the court ruled that the US president does not have the authority under the International Emergency Economic Powers Act (IEEPA) to impose tariffs. The executive branch does have emergency powers, but not to unilaterally levy taxes. Specifically, Judge Roberts mentioned the separation of powers regarding revenue and taxation: “The Constitution ensures that only the House can ‘propose the supplies requisite for the support of government’ by initiating ‘Bills for raising Revenue.’” Clearly stated, the US president overstepped his position by creating blanket tariffs on items and regions.

This leaves many issues to be worked out, and pharma is having a particularly challenging time when you consider its highly integrated global networks. Then there are currently valid tariffs imposed under “Section 122” and “Section 301,” intended to address balance of payment deficits invoked in 150-day cycles. This demands advanced scenario planning to adapt to the cost fluctuations. It is vital to remain operationally agile to navigate a fragmented and rapidly shifting regulatory landscape.

Regulators have standard processes for petitions or appeals, but in the current unusual situation, there has not been any clearly defined process on how to reclaim losses due to the recent tariff ruling. On the one hand, you have the US government that knows all the information about these past payments, and on the other, you have organizations who must calculate the differences without readily available clear information. This does not mean we can’t take action.

Pharm Exec: The Supreme Court ruling created dual-track compliance demands. To that end, what strategies are companies pursuing to limit supply chain disruptions?

Bell: At Marken, we were already prepared for immense scrutiny, as it is a part of our success to proactively streamline and approach regulatory compliance.

First, an organization must determine how products were impacted and whether certain tariffs were applied. Right now, we are in a high-stakes, granular audit and adapt scenario, reviewing HTS (harmonized tariff schedule) codes to determine which categories fall under the now-overturned tariffs and those that still fall within other valid duties, like “Section 301.”

Second, even after overturning the IEEPA tariffs, companies should understand what the impact of still existing tariffs will be on their business. It is important to search for exemptions or any special treatments that may help mitigate the bottom line.

Finally, if a company has paid any tariffs now overturned, they need to contact a broker immediately to begin the process for a refund. This cannot be understated. They do not want to miss out and need to contact a broker.

Historically, the method of claiming wrongfully charged or erroneous duties was through a “protest,” but these are submitted in a certain window of a standard 180 days. Once this time has closed, you can no longer submit.

This has created a conundrum. If you paid a tariff (i.e., in January of 2025), the window for claiming a protest has technically passed. There have been no instructions going forward from the US government, only from the courts who have declared that these tariffs are not applicable and need to be refunded. For this reason, stakeholders are going through the established method of declaring a “protest.”

Reasonably, US customs should expand this 180-day window, but there has been no official word. Again, there is a disconnect, a procedural gap, between what the courts ordered, what the US administration is doing, and what is being actioned at customs. If you are an importer, you do not want to be left behind when this gets straightened out, and you need to contact your broker immediately.

Pharm Exec: Why, as a result, are some companies reconsidering US launch strategies?

Bell: Companies are reconsidering because they do not know what to expect. It is difficult to forecast costs. At Marken, we see companies must decide if they can feasibly launch a clinical trial in the US, if it is feasible to begin clinical trials outside the US, or simply delay the start with US cohorts until there is better clarity.

Any business needs stability, and knowing where and when your clinical trials operate is critical to completing a successful trial. If these terms change mid-trial, it causes a significant disruption, increased costs, or loss of resources. Many sponsors are going to be carefully weighing these considerations.

There are also considerations for the lifecycle of the product, like does the pharma manufacturer need to charge more to make up for the price increase from future tariff issues (or what is happening in Iran)?

Pharm Exec: Do you think it’s another example in the trend of supply chains shifting toward EU and Asian markets?

Bell: Companies are thoroughly assessing their supply chain strategies, especially when it comes to manufacturing pharmaceuticals. If a region is offering better incentives and stability for making future business plans, it is going to be considered. These regions are also trying to attract business.

Even recognizing the US as the world's largest market, there seems hesitancy to commit to trials or other launches in consideration of weighing all options. No one can define their budget — the dynamic changes from the current US administration make it difficult to assess final costs and launch pricing.

Pharm Exec: How are these changes intersecting with global supply chain regulations such as the Drug Supply Chain Security Act (DSCSA) and the Falsified Medicines Directive?

Bell: The effects of tariffs (and the Iran war) are separate issues from the DSCSA. The tariffs should not have a direct impact in adopting DSCSA (outside of cost, but that is there, regardless), but if companies are having trouble getting products into the US, why comply? The DSCSA could increase costs further, as you need the manpower and processes in line to implement the standards of the DSCSA, but this would be an upgrade already considered in the budget regardless.