In this week’s edition of InnovationRx, we look at the havoc of generic drug tariffs, the companies looking to cash in on the coming peptide bonanza, the ongoing cyclosporiasis outbreak, Tempus’s acquisition of a cancer-testing company, and more. To get it in your inbox, subscribe here.
President Trump said that he’ll impose a 100% tariff on all generic drugs starting in August 2028–and rising to 200% the following year.
Around 90% of prescriptions are filled by generics, which are largely manufactured overseas, where costs to make these inexpensive drugs are cheaper. India, for example, is a major hub of generics manufacturing: nearly half of generics prescribed in the U.S. are made there.
The effort to force manufacturing of low-cost generic drugs back to the U.S. seems likely to backfire, increasing costs for cash-strapped patients.”Generic drugmakers lack the operational flexibility of large branded pharmaceutical companies,” Rajiv Leventhal, an analyst at Emarketer, tells Forbes. “Making a two-year shift of manufacturing to the U.S. a gargantuan, if not impossible, undertaking.”
There were barely any details on the policy as of Wednesday morning. Trump made the announcement on his own social media platform, Truth Social, and did not release any additional details, let alone an official executive order. That makes it tough to tell whether the tariffs will actually happen.
As Leventhal says: “The deeper this administration gets into its term, the less certain it has become whether the policy will be implemented as proposed, how it would be enforced, or whether it would ultimately survive.”
Peptides May Soon Be Legal. These Companies Are Ready To Cash In
Shaun Noorian, founder and CEO of Empower Pharmacy
Houston Chronicle via Getty Images
When the FDA panel that’s considering whether to recommend legal production of seven peptides meets starting Thursday, Shaun Noorian will be at its Maryland campus in person. “I wouldn’t miss it for the world,” Noorian, the founder and CEO of Houston-based Empower Pharmacy, one of the nation’s largest compounding pharmacies, tells Forbes. “The who’s who of the peptide space will be there.”
Hundreds of others are expected to jam into the room as well, including compounders, telehealth founders and longevity influencers, who are flying in for the event. “It will be a circus,” says Scott Brunner, CEO of the Alliance for Pharmacy Compounding, the industry’s trade group. “Everybody and their brother is coming.”
While these peptides are currently not legal to produce for anything other than “research purposes,” that hasn’t stopped a booming gray market from exploiting that loophole. There’s little scientific data on their safety and efficacy, and the many sketchy sellers who distribute them operate with no oversight. Still, the illicit peptide market could be worth an estimated $3 billion.
And that has many in the compounding and telehealth industries salivating—and preparing—for the possibility. “We’d love to make them, and we’re getting ready to do it,” says Mike Walker, cofounder and president of Strive Pharmacy, another major compounder. “We are just waiting for the green light from the FDA.”
Pinpointing The Cause Of The Cyclosporiasis Outbreak
Public health officials are racing to pin down the cause of the cyclosporiasis outbreak, which has sickened thousands of people–including sending 308 to the hospital– in at least five states. Federal regulators confirmed more than 4,000 cases, with more than 7,400 additional cases suspected. In Michigan alone, more than 7,000 have fallen ill with the nasty foodborne disease, which causes severe diarrhea, and comes from exposure to a parasite in contaminated water used to wash or irrigate crops.
FDA officials suspect iceberg lettuce imported from Mexico by agricultural giant Taylor Farms and supplied to Taco Bell is to blame for the current outbreak. Both companies have voluntarily recalled the lettuce, but confusion reigned as follow-up testing showed it was a false positive. Despite that, the FDA clarified on X that the Taylor Farms lettuce is most likely the cause. “Do not eat recalled lettuce from Taylor Farms de Mexico,” the agency wrote in an update.
Bruce Taylor, a third-generation Salinas, California, lettuce grower, founded Taylor Farms in 1995 and built it into a $7 billion agricultural behemoth with more than 25,000 employees and 30 processing facilities. Over the past week, there has been an online uproar over its $1 million donation to a pro-Trump super-PAC, as well as its executives meetings at the White House and with FDA officials on Thursday.
The outbreak is only the latest foodborne illness to strike the U.S. this year. The CDC has tracked multiple such outbreaks this year, including an E. coli outbreak linked to frozen blueberries, a salmonella outbreak that has hospitalized more than 100 people, a cheese-caused listeria incident and infant botulism cases linked to powdered formula.
The Trump Administration has scaled back its monitoring of food-borne illnesses, including cyclosporiasis, slowing the government’s response. All told, the CDC has lost more than a quarter of its total staff since 2025, while the director’s job has been vacant for nearly 11 months.
On Tuesday, HHS Secretary Robert F. Kennedy claimed to have the outbreak “under control,” and dismissed criticisms of the administration’s funding cuts as “invalid.”
Deal of the Week
Health tech company Tempus (market cap $9 billion) agreed to buy cancer test maker Personalis for about $1.5 billion. Personalis’s minimal residual disease test detects small amounts of tumor DNA in order to track how well a cancer treatment is working. Eric Levkovsky, the billionaire founder of Groupon, started Chicago-based Tempus in 2015.
The acquisition expands an existing partnership between the two companies that began in 2023. Personalis’s liquid biopsy is part of a growing market for minimal residual disease tests, which the companies have said is a $20 billion opportunity. In a call to discuss the deal, Levkovsky, who is also the company’s CEO, said that once validated cancer tests can expand quickly. “You go from zero revenue for some of these tests to significant revenue,” he said.
Analysts at Jefferies were more skeptical, and noted that it was a major shift from executives’ statements in May that there was no advantage to an acquisition over continuing the partnership (OK?). “We question if the rationale is intended to offset a slowing core diagnostics business,” they wrote in a Monday research note. Investors seem to agree: Tempus’ stock fell 7% since the deal was announced (through Tuesday’s close) and Personalis’s stock tanked 13%.
What We’re Reading
A most wanted fugitive appears to have been secretly working as a biotech executive for years.
Sanford Health’s billionaire backer Denny Sanford died at age 90.
Ozempic drugmaker Novo Nordisk sued rival GLP-1 manufacturer Eli Lilly in federal court in New Jersey Tuesday, accusing the company of using “intentionally selected outdated studies” to mislead consumers.
The Trump administration is withholding $1 billion in Medicaid funds from California and Minnesota, alleging signs of fraud.
Hospitals are increasingly worried about rising cases of a “nightmare” drug-resistant bacterial infection with a high fatality rate.