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Pharma’s on edge, and for good reason. 

Drugmakers are bracing for the ripple effects of President Donald Trump’s planned tariffs on pharmaceuticals imported into the U.S. It’s still unclear what exactly those levies will look like or when they’ll be announced. 

But the Trump administration disclosed on Monday that it had opened a so-called Section 232 investigation into how importing certain pharmaceuticals affects national security — a move widely seen as a prelude to initiating tariffs on drugs. Over the weekend, Commerce Secretary Howard Lutnick also said those duties will come “in the next month or two.” 

As we kick off earnings season, we’re watching investor and analyst calls closely to see how drugmakers talk about tariffs and their potential impact on their businesses. 

So far, two of the largest pharmaceutical companies — Eli Lilly and Johnson & Johnson — have pushed back on Trump’s tariff threat. Those are the same two drugmakers that announced new multibillion-dollar investments in U.S. manufacturing over the last two months to build goodwill with the president. 

J&J was the latest company to comment on tariffs during its earnings call on Tuesday, though some executives appeared to have different views on the levies.  

In an interview with CNBC, the company’s CFO Joe Wolk said Trump “doesn’t want to hurt anybody” with his tariffs. He added that the administration’s probe is likely to show most medicines shipped to the U.S. are cheaper generics, not the branded therapies sold by J&J.

“Us and our peers are more into the high science… that’s where we have a differentiation,” Wolk said. “Not only is it good for its business, but it provides America with a competitive advantage in terms of leading the world in life sciences.”

Some analysts were pleased with Wolk’s similar commentary to Bloomberg on Tuesday. 

J&J management “downplayed tariff risks this morning, which we view as an important positive development for perception about the threat to [the company] and the branded biopharma industry at large,” Leerink Partners analyst David Risinger said in a note on Tuesday. 

But J&J CEO Joaquin Duato echoed the warnings of health policy experts, who say that the tariffs could increase drug costs for patients and exacerbate medication shortages in the U.S. 

“There’s a reason…why pharmaceutical tariffs are zero. It’s because tariffs can create disruptions in the supply chain, leading to shortages,” Duato said during an earnings call on Tuesday. He added that favorable tax policies would be a more effective tool to boost U.S. manufacturing capacity of both drugs and medical devices.

Also on Tuesday, J&J said it expects to record a $400 million tariff expense in 2025, which reflects already-announced levies and doesn’t predict the effects of pharmaceutical-specific tariffs. It is primarily related to the company’s medical device products, executives said on an earnings call.

Duato’s sentiment is similar to that of Eli Lilly CEO Dave Ricks, who warned tariffs could hamper research and development in the industry and hurt patients. He said drug prices are essentially capped in Europe and U.S., which means higher costs from tariffs would be felt elsewhere.

There has traditionally been more pricing freedom in the U.S., but recent legislation, such as the Inflation Reduction Act, has introduced some price negotiation or caps for drugs covered by Medicare.

“We can’t breach those agreements, so we have to eat the cost of the tariffs and make trade-offs within our own companies,” Ricks told BBC earlier this month, just over a month after the company announced $27 billion in new domestic manufacturing. 

“Typically, that will be in reduction of staff or research and development, and I predict R&D will come first. That’s a disappointing outcome,” Ricks said.

We’ll continue to follow pharma’s commentary this earnings season, so stay tuned.

Feel free to send any tips, suggestions, story ideas and data to Annika at annikakim.constantino@nbcuni.com.

MedTech and medical device makers are scrambling to mitigate the impact of the Trump administration’s new tariffs on China, but already J&J has raised the alarm that the new levies will pose a $400 million headwind for its orthopedic and cardiac device unit.

MedTech trade groups are pressing the Trump administration for an exemption for medical goods, arguing the duties will raise prices for the nation’s health system and the government itself through higher costs of care in Medicare and Medicaid.

But U.S. makers of protective medical equipment are actually cheering the new tariffs, which are being imposed on top of existing levies. For needles and syringes from China, that amounts to a 245% import cost.

After years of state-funded Chinese PPE makers undercutting them on price, the new tariffs could help U.S. manufacturers level the playing field at home, the president of New York-based Altor Safety told me. He says it could give U.S. producers a chance to take share from China, and with higher volumes of production, they could actually bring prices down.

Feel free to send any tips, suggestions, story ideas and data to Bertha at bertha.coombs@nbcuni.com.

The U.S. Food and Drug Administration has cleared Dexcom’s updated G7 continuous glucose monitoring system for use by adults with all types of diabetes, the company announced in a release. 

A continuous glucose monitor, or a CGM, is a small sensor that pokes through the skin and sends real-time glucose readings to an app. Glucose is a type of sugar people get from food, and it’s our bodies’ main energy source. 

For patients with diabetes, managing glucose is crucial for preventing and delaying serious health problems, according to the Centers for Disease Control and Prevention. 

Dexcom sells a range of CGM products, including a consumer-friendly sensor called Stelo that the company launched in August. But its latest FDA clearance reflects its continued push to expand market share within its core user base: diabetes patients. 

The biggest update to Dexcom’s new G7 system is its extended wear time. The new G7 sensor will last users 15.5 days, including a 12-hour grace period that gives users a buffer to switch out their sensor. The previous generation lasted for 10.5 days, including the same 12-hour grace period. 

Dexcom competes with other major medical device companies like Abbott and Medtronic that sell CGMs. Abbott’s CGMs can be worn for up to 15 days, while Medtronic’s can be used for up to 7 days, according to the companies’ websites.  

Dexcom’s updated G7 is also slightly more accurate than its previous model, the company said. The new device has only been approved for use in adults, however, while the previous generation can be used by patients ages two and older. 

“This milestone sets a new standard in CGM and is a testament to our continued leadership in glucose biosensing,” Jake Leach, Dexcom’s chief operating officer, said in a statement.

The updated G7 sensor will be available in the second half of the year.  

After a rocky 2024 marred by a restructuring of its sales team and lower revenues per user, Dexcom’s stock lost about 37% of its value. Shares have fallen more than 10% this year, while the Nasdaq has dropped more than 14% for the same period. 

Analysts at Piper Sandler said Dexcom’s latest FDA approval is a “meaningful catalyst” for the company. Depending on how President Donald Trump’s tariffs end up affecting Malaysia, where Dexcom manufactures some of its devices, the analysts said the 15-day sensor could lead to a “meaningful lift” in gross margins and revenue next year. 

“This  product  should  allow  DXCM  to  compete  more effectively with its large competitor in the space as it closes the wear-length gap,” the analysts wrote in a note last week.

Leerink Partners analysts had a more lukewarm take on the announcement, calling the approval an “incremental positive” for Dexcom.  

Read Dexcom’s full announcement here.  

Feel free to send any tips, suggestions, story ideas and data to Ashley at ashley.capoot@nbcuni.com.