Tariff pressure pushes smaller biotechs into deals

The Trump administration is extending its drug-pricing strategy to smaller pharmaceutical companies, offering them a way to sidestep newly announced tariffs by agreeing to lower prices and potentially shift manufacturing to the U.S.

The talks mirror earlier negotiations with large drugmakers, STAT's Daniel Payne writes, with the sides drawing up confidential, voluntary agreements based on "most-favored nation" pricing and including platforms like TrumpRx. While the tariffs, set to take effect within months, are clearly being used as leverage, it remains unclear how many companies will ultimately sign on.

Small and medium companies "develop more than half of all FDA‑approved medicines yet often lack the capital to build dedicated manufacturing facilities as they weather an industry defined by high costs, long development timelines, and significant risk," BIO CEO John Crowley said in a statement.

Washington

Those tariffs come with major loopholes

While the Trump administration said it would impose 100% tariffs on imported brand-name drugs yesterday, the policy is riddled with carveouts that blunt its impact.

Companies that agree to lower prices and build U.S. manufacturing capacity can avoid the tariffs entirely, and those that pledge to shift production stateside can see rates reduced to 20%, STAT's Daniel Payne reports.

Exemptions for key trading partners and the expectation that many firms will ultimately comply suggest the tariffs are perhaps more useful as a leverage tool. But there's concern that the tariffs could still raise costs, disrupt supply chains, and ultimately harm midsized biotech firms in particular.

"The policy risks undermining the very American biotech companies that drive the majority of new breakthroughs in cancer, rare diseases, and other life-threatening conditions," said Alanna Temme, president of the Midsized Biotech Alliance of America.

opinion

Peptides over statins expose medicine's trust gap

When his patient abandoned a well-studied statin — despite elevated cardiovascular risk — but continued using an unproven peptide bought online, longevity-focused physician Vikas Patel was stunned. Opining for STAT, Patel says the case illustrated a troubling shift in the public trust of medicine: Now, the more validated a drug seems to be, the less safe it's starting to seem to many patients.

Backed by large-scale trials, statins remain among the most effective and safest tools for preventing heart disease, but misinformation and anecdotal side effects routinely outweigh data in patient decision-making, he writes.

Meanwhile, peptide compounds like BPC-157, with virtually no meaningful human evidence and significant regulatory concerns, are being embraced with confidence. And it's up to physicians to pick up the pieces, Patel writes.

podcast

Biotech investors' plea to Trump, and a busy M&A week

How has the Food and Drug Administration's recent decisions on rare disease drugs affected investment trends? Why is Eli Lilly getting into sleep medicine? And where did Allison go on her vacation?

We discuss all that and more on this week's episode of "The Readout LOUD," STAT's weekly biotech podcast. Biotech investor Rod Wong joins us to talk about why an industry-patient coalition he's part of sent a letter to President Trump asking for more regulatory flexibility at the FDA.

We also discuss the U.S. approval of Eli Lilly's obesity pill, recent deal-making by large pharma companies, a strange story about promotion of psychedelic drugs on YouTube, and more.

Listen here.

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