LONDON (April 3): Drugmaker stocks gained a temporary reprieve on Thursday as US President Donald Trump spared pharmaceutical products from reciprocal tariffs, but executives and analysts warned it was premature to celebrate as tariffs were still likely to come.

Trump imposed a 10% tariff on most US imports, as well as much higher levies on dozens of rivals and allies alike, but temporarily exempted some goods, including pharmaceuticals, benefiting major exporters including India, Japan and Ireland.

Shares of US drugmakers were mostly trading flat before the market open compared to a market rout in other sectors. AbbVie and Johnson & Johnson rose marginally, while Pfizer and Biogen fell 1%.

Asian healthcare stocks surged, led by Indian generic drugmakers, defying the broader market drop. European healthcare stocks also outperformed.

British drugmakers GSK and AstraZeneca rose between 2% and 3%, reflecting the relief that pharmaceutical products for now remained out of the crosshairs of the trade wars.

A US official said on Wednesday the president plans separate tariffs targeting the pharma sector.

Trump in his White House Rose Garden announcement once again namechecked the industry, predicting that pharma companies will come "roaring back" to the US, and warning if they don't, "they got a big tax to pay".

"The administration has reinforced the need to maintain robust and resilient domestic manufacturing capacity in pharmaceuticals," Stephen Farrelly, global pharma & healthcare lead at ING. "So it is being highlighted as a sector they needs to reshore."

Many in the industry predicted the recent uncertainty over tariffs would continue to cast a shadow over drugmakers.

"The only thing that feels certain is more uncertainty," Barclays analyst Emily Field told Reuters.

One source at a European drugmaker said the sense on pharma sector tariffs was: "It's not today, but it's coming."

Trump's executive order listed pharmaceuticals alongside lumber, semiconductors and other sectors that could be subject to investigation under Section 232 of the 1962 US Trade Act.

US manufacturing costs for pharma companies will rise as country-specific tariffs will affect key supplies such as organic chemicals and glassware used to make pharma products, Bernstein analysts said in a note. They calculated an additional US$45 billion of import cost risk to the pharma industry.

Jefferies analysts said Biogen and Amgen were among the drugmakers with most ex-US exposure, while UBS pointed to AbbVie and Merck having significant overseas manufacturing.

Medical devices and diagnostics equipment did not appear to be exempted. Shares of companies such as GE Healthcare and DexCom fell 3% in premarket trading.

Medical device industry group AdvaMed said the tariffs would likely lead to cuts in research and development spending and threatened the US position as a leader of innovation in the medtech sector.

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