KUALA LUMPUR, April 15 — The United States has formally begun national security investigations into pharmaceutical imports, a move expected to pave the way for new tariffs on drug products and active pharmaceutical ingredients (APIs).
The investigations are being conducted under Section 232 of the Trade Expansion Act of 1962, which enables the US president to impose tariffs deemed necessary to safeguard national security. US President Donald Trump hinted last April 9 that tariffs on imported pharmaceuticals would be issued soon.
“We don’t make our own drugs anymore,” Trump said at a White House event, as quoted by The New York Times, arguing that the US was overly reliant on foreign sources for essential medicines.
Health Minister Dzulkefly Ahmad revealed yesterday that Malaysia exported RM560 million worth of pharmaceutical products to the US in 2024, accounting for 18.5 per cent of Malaysia’s total pharmaceutical exports. Locally-based pharmaceutical companies such as Novugen Pharma and Biocon Sdn Bhd are among those with exposure to the US market.
Dzulkefly warned that the cost of drugs and medical devices imported by Malaysia may rise if US tariffs extend to APIs or components in finished medical products. Local generics producers, the health minister said, could also face higher procurement costs due to increased global demand for API.
Trump administration officials said the probe will also examine pharmaceutical ingredients and components, raising concern that Malaysia’s pharmaceutical exports could be indirectly affected if the tariffs extend to global supply chains.
While pharmaceuticals were initially excluded from the reciprocal tariffs announced by the US on April 2, Trump’s remarks Monday confirmed a reversal in policy. The new tariffs are expected to accompany a broader trade agenda targeting multiple sectors, including semiconductors.
Trump also indicated that tariff exemptions may be granted on a case-by-case basis, citing recent relief for electronics firms. However, it remains unclear whether similar leniencies will be applied to pharmaceutical importers.
The administration has yet to provide details on which drug categories or suppliers will be affected. However, there are concerns that the tariffs could lead to price shocks in downstream markets, particularly for countries like Malaysia that rely on a mix of imported and locally manufactured pharmaceuticals.
The Bursa Malaysia Health Care Index dropped 0.66 per cent to 1,840.42 as of 11.30am today, down 12.32 points from yesterday’s close of 1,852.74. Losers outnumbered gainers 8 to 7, with four counters unchanged.
Shares of Malaysia’s top four glovemakers by market capitalisation – Hartalega Holdings Berhad, Top Glove Corporation Berhad, Kossan Rubber Industries Berhad, and Supermax Corporation Berhad – all declined.
Pharmaceutical manufacturer Apex Healthcare Berhad, medical cable and device maker Supercomnet Technologies Berhad, glovemaker Careplus Group Berhad, and medical device company UMediC Group Berhad also traded lower, as of the same time.
Gainers were led by private hospital operators IHH Healthcare Berhad, KPJ Healthcare Berhad, and TMC Life Sciences Berhad.
Pharmaceutical firms Pharmaniaga Berhad and YSP Southeast Asia Berhad posted gains, alongside wellness supplement producer Nova Wellness Group Berhad and medical supply company Adventa Berhad, which manufactures single-use medical and surgical products.
Year-to-date, the Bursa Malaysia Health Care Index – which tracks rubber glove manufacturers, private hospitals, and pharmaceutical companies – has declined 23.17 per cent from 2,380.78 at the start of 2025.
The development comes amid heightened US-China trade tensions and increasing calls from Washington to reshore critical industries, including medicine and chip manufacturing.
