Dr. Scott Gottlieb: Tariffs are a very inefficient tool to reshore drug manufacturing
Summary
- Tariff Safety for Big Pharma: Major pharmaceutical companies are likely safe from new tariffs because their "Most Favored Nation" and drug pricing deals with the administration specifically excluded them.
- Generic Drug Risk: Tariffs on generic drug makers sourcing active ingredients (API) from China (Section 232) would be counterproductive. Gottlieb argues these are low-margin products; tariffs won't force reshoring but will cause companies to exit the market, leading to drug shortages.
- GLP-1 Dominance: Eli Lilly (LLY) is viewed as having the "best in class" portfolio over Novo Nordisk (NVO), specifically citing Tirzepatide and the upcoming "Triple G" (Retatrutide) which shows superior efficacy data.
Trade Ideas
Scott Gottlieb
Former FDA Commissioner; Board Member (Pfizer, Illumina, UnitedHealth); Partner at NEA (Venture Capital)
0:41
"I would be surprised to see tariffs put back on the table with respect to the drugmakers, because a lot of the deals... specifically excluded tariffs being imposed on those companies." The market may be pricing in "Trump Trade" tariff risks across the board, but Big Pharma (like Pfizer, where Gottlieb is a board member) has regulatory immunity due to prior pricing agreements. This makes them a defensive play against trade war volatility. LONG. The administration reneges on verbal/written agreements regarding tariff exclusions.
Scott Gottlieb
Former FDA Commissioner; Board Member (Pfizer, Illumina, UnitedHealth); Partner at NEA (Venture Capital)
3:27
"It certainly looks better in terms of overall efficacy than the Novo compounds." (Referring to LLY's portfolio). Novo Nordisk is losing its "best in class" status. As LLY releases data on Retatrutide (Triple G) and oral formulations, NVO's comparative efficacy disadvantage will pressure its valuation and market share. AVOID. LLY's new drugs fail safety trials, allowing NVO to retain duopoly status without superior competition.
Scott Gottlieb
Former FDA Commissioner; Board Member (Pfizer, Illumina, UnitedHealth); Partner at NEA (Venture Capital)
4:03
"I think Lilly has a best in class drug with respect to Tirzepatide... Lilly has another drug behind Tirzepatide, Retatrutide... which may be even more effective." LLY is innovating faster than competitors. The upcoming "Triple G" agonist targets three receptors (GLP, GIP, Glucagon) and early data suggests it is superior to current options. This technological moat will allow LLY to capture dominant market share in the obesity space. LONG. Potential side effects from the triple-agonist mechanism; failure in Phase 3 trials.
