Generic tariffs may be favorable for drug distributors, Evercore says

McKesson

22/07/2026 10:25

** Evercore analysts say tariffs imposed on generic drugs could potentially be a tailwind for U.S. drug distributors
** Trump said in a post on X on Tuesday that generic drugmakers will have to manufacture medicines for the U.S. locally or be hit with a 100% tariff from August 2028 followed by a 200% tariff starting the year after
** "We estimate that generic drugs make up ~50% of distributor gross profits and that the distributors should broadly benefit from the generic drug tariffs starting in 2028" says Evercore
** However Evercore cautions that some of the generic gross profit is more fixed in nature and with tariffs potentially rising 100% or more, the distributors will likely structurally share their higher profit dollars with other channel participants
** McKesson MCK.N, Cardinal Health CAH.N, and Cencora COR.N dominate the US pharmaceutical wholesale distribution industry
** Brokerage says there could be exceptions made for companies that are building US capacity, even if not completed by the 2028/29 deadlines 
** Up to last close, CAH up 10.5%, MCK up 1% and COR down 10.3% YTD

 (Reporting by Christy Santhosh)
 ((Christy.Santhosh@thomsonreuters.com))