Big Pharma was trading higher on Thursday as pharmaceuticals, under pressure from a raft of ongoing industry-specific headwinds, managed to avoid the sweeping new tariff measures the Trump administration has just announced.

VanEck Vectors Pharmaceutical ETF (NASDAQ:PPH), which represents 25 of the leading global drugmakers, gained following a sharp selloff ahead of the tariff announcement, which indicated sharply higher duties against some of the leading trading partners of the U.S.

In reaction, the industry lobby group Pharmaceutical Research and Manufacturers of America (PhRMA) welcomed Trump’s resolve to encourage domestic manufacturing.

“We look forward to working with the administration on ways to ensure America remains the most attractive place in the world to discover and manufacture new treatments and cures,” noted Alex Schriver, PhRMA Senior Vice President of Public Affairs.

However, Big Pharma is not out of the woods yet as the sector continues to navigate the fallout from the abrupt departure of Dr. Peter Marks as the director of the U.S. FDA's Center for Biologics Evaluation and Research (CBER).

A vaccine proponent under whose watch the agency cleared COVID-19 vaccines during the pandemic Marks was forced to resign last week, marking the first high-profile departure under the new HHS secretary, Robert F. Kennedy, Jr., a well-known vaccine skeptic.

During Trump’s second term, the Health and Human Services Department has lost nearly 20,000 employees, including thousands at the FDA, which, according to senior agency leaders, could affect the country’s food and drug inspections.

Meanwhile, despite an exemption from country-specific tariffs on Wednesday, potential pharma-specific tariffs based on the so-called Section 232 national security investigations will continue to weigh on the sector, J.P. Morgan analyst Chris Schott argued in a research note.  

“We expect some level of overhang on the biopharma sector until the Section 232 pharmaceuticals-specific tariffs are announced,” Schott wrote.

Despite the broader tariffs” that Trump has just imposed, pharmaceuticals will continue to be “a relative “safe haven.” Schott argued, noting that biopharma “should be able to manage through tariffs over time given the low capex intensity & high gross margin profile of the sector.