As public companies prepare their third quarter Form 10-Q filings, the rapidly shifting policy landscape has created new disclosure challenges for the life sciences sector. The recently announced pharmaceutical tariffs and ongoing government shutdown both carry potential financial and operational implications that warrant close attention. For biotech companies, these developments underscore the need for clear, proactive disclosure around supply chain resilience, pricing exposure, and regulatory uncertainty. In this post, we outline key disclosure considerations to help issuers navigate this evolving environment and manage investor expectations heading into the end of the year.
Pharmaceutical Tariffs
As previously discussed on Biotech Briefings, on September 25, 2025, President Trump announced 100% tariffs on imported branded or patented pharmaceuticals, unless the importing company is building U.S. manufacturing capacity. While the effective date of these tariffs is currently uncertain, the potential impact for biotech companies could be staggering and result in significant cost increases, constraints on biotechs’ ability to commercialize drug products or difficulties in meeting manufacturing obligations owed to licensing partners.
Issuers should consider how these potential tariffs, if imposed, would impact their business, financial condition and results of operations. Those issuers who might be impacted by these tariffs should consider including language in their MD&A disclosure regarding known trends and uncertainties related to the tariffs and the potential for increased costs in the future. In addition, issuers should review their risk factors and forward-looking statement disclaimers to assess whether updates are appropriate to reflect the latest developments and describe any additional risks related to these proposed tariffs.
Government Shutdown
The ongoing U.S. government shutdown, which began on October 1, 2025, has impacted a number of federal agencies and created regulatory uncertainty for many issuers. The U.S. Food and Drug Administration (FDA) has not been able to accept applications for new drugs, generics, biologics, biosimilars or medical devices that require payment of a user fee while the shutdown is in effect. In addition, the Securities and Exchange Commission (SEC) is also impacted by the shutdown, causing delays for certain registration statements and a pause in the review of waiver and other requests. For more information on SEC impacts, see posts on Gibson Dunn’s Securities Monitor blog: here and here.
Issuers should consider how the government shutdown has impacted and may continue to impact their business. For example, if delays in the acceptance, review or approval of applications submitted to FDA, facility inspections or lot-release/testing activities could delay or increase the cost of clinical trials, manufacturing scale-up, product launches or post-approval changes, particularly with respect to significant product candidates or if it is the issuer’s first potential commercial launch, then issuers should discuss such delays or cost increases in their MD&A, risk factors and forward-looking statement disclaimer disclosures. In addition, if the limited operations at the SEC could impact issuers’ access to the capital markets, then such impact should be discussed as well.
Gibson Dunn’s Life Sciences and International Trade teams are closely tracking tariff and government shutdown developments. Our attorneys are available to assist clients as they navigate the challenges and opportunities posed by the current, evolving legal landscape and prepare their Form 10-Q disclosures.