Managing Tariff-Driven Cost Increases Without Disrupting Customers

According to Franco Stevanato, CEO of Stevanato Group, tariff policies are beginning to influence how pharmaceutical companies think about manufacturing location and supply chain resilience, but the shift toward localization will take time. While tariffs have created temporary cost pressures for the company, including surcharges passed on to customers, those impacts have largely been accepted by clients and are not yet driving immediate supply chain reconfiguration.

Stevanato operates 13 sites across nine countries and generally supplies products regionally, though certain items continue to be manufactured in Europe. Capacity expansion in the US—particularly at the company’s facility in Fishers, IN—is underway, but meaningful ramp-up will take several more years. In the short term, the company cannot quickly redirect production or fully restructure its global supply network.

Despite these near-term headwinds, Stevanato sees tariffs as a catalyst for longer-term opportunity. The company already has significant campus infrastructure in place, positioning it to benefit as customers reassess their footprint strategies. Over a three- to four-year horizon, leadership expects more pharmaceutical manufacturers to increase investment in US-based production as they seek to mitigate trade risks, improve regional supply continuity, and align manufacturing closer to end markets.

However, the pace of change is constrained by the realities of pharmaceutical operations. Site development, validation, regulatory approvals, and capacity scaling require long lead times, making rapid shifts impractical. Decisions around localization must also align with pharma companies’ internal investment cycles and long-term network planning.

Overall, tariffs are not triggering immediate supply chain realignment, but they are accelerating strategic discussions around regionalization and domestic capacity. For packaging companies like Stevanato, this evolving landscape presents a medium-term growth opportunity as customers gradually move toward more localized and resilient manufacturing models—particularly in North America—while managing short-term operational and cost pressures.

Stevanato also discussed the strategic advantages to expanding production within the US and much more.

A transcript of his conversation with PC can be found below.

PC: In the near term, how are industry leaders balancing increased costs from tariffs with pricing strategies and operational efficiencies to remain competitive in the US market?

Stevanato: In terms of the type of business-to-business relationship that we have with our clients, usually, their priorities consist of securing the supply chain and the quality of the product, because we are delivering several hundred millions of product, and for them, the cost of the primary package in the full cost of the drugs is really minor. We are talking about what can be maybe sometimes, 10 to 100 times higher than the cost of the molecules, and certain syringes are storing a few thousand dollars per injection, looking at the biologics.

For them, prices are not the main concern. In fact, usually in our five-year contract with our customers, pricing adjustment is already regulated. It’s usually linked to inflation, to labor cost, and energy. Even if there is an extraordinary event, there is an automatic adjustment.

We had the spike on gas in Europe a few years ago, and we passed to increase the price during the year. I'm sorry to take a long answer, to say, we call the customer, we explain the situation. They understand perfectly. We pass some surcharge, or sometimes we change the income terms. We don't see impact on this, and I see clients open to settle the increase.