UnitedHealth Group is feeling “better than pretty good” about the potential for pharmaceutical tariffs and the resulting possible impact on its businesses.
President Donald Trump has threatened tariffs on pharmaceutical imports, with U.S. Commerce Secretary Howard Lutnick saying April 13 that the tariffs will be implemented “in a month or two.”
“When we look at our potential exposures, we feel pretty good. In fact, I’d say better than pretty good in terms of the degrees of price protection mechanisms we have in preexisting contracts and also various pieces of legislation, which limit the ability of manufacturers to pass price increases down through the system,” UnitedHealth CEO Andrew Witty told investors April 17.
“When you look at the structure of the marketplace, we feel pretty well positioned for that.”
Mr. Witty noted that it’s a dynamic situation and it’s unclear as of now what pharmaceutical tariffs may or may not look like.
“We’re watchfully waiting,” he said. “There’s many kinds of layers of government protection within the regulations that sit over the drug companies in terms of their ability to increase prices above inflation. There are things like Medicaid best price protections, which would also have potential applications there. I just want to reiterate, like everybody else, we don’t know yet what the reality of this is.”
Investors have largely seen UnitedHealth and the wider healthcare industry as relatively insulated from the ongoing global trade war, the Minnesota Star Tribune reported April 15. Before UnitedHealth reported its first quarter earnings on April 17, the company’s stock price was up 12% amid the president’s volatile tariff policies.
On April 17 however, UnitedHealth’s stock decreased 20% following an “unacceptable” quarterly performance amid challenges within the company’s Medicare Advantage business.
