Merck (MRK) shares plunged 5.01% in intraday trading on Friday, as President Donald Trump's threat of new tariffs on the pharmaceutical sector sent shockwaves through the industry. The dramatic drop came amid a broader market sell-off, with several other major drugmakers also experiencing significant declines.

Trump's announcement that the pharmaceutical sector is "under review" for potential tariffs caught investors off guard, especially after the industry had briefly been spared from sweeping tariffs announced earlier in the week. The President indicated that steep tariffs on the sector are expected to be announced in the near future, reversing the temporary relief felt by pharmaceutical companies.

The impact was felt across the board, with other major players in the industry also seeing their stocks tumble. Biogen fell 2.1%, Pfizer dropped 1.7%, and Eli Lilly saw a sharp 3.6% decline. The Arca Pharmaceutical Index, which tracks the sector's performance, was down 3% overall, underscoring the widespread concern among investors.

This latest development adds to the growing uncertainty surrounding the future of drug research and development in the United States. A recent Barron's report highlighted the critical role of National Institutes of Health (NIH) funding in drug discovery, with NIH-funded research contributing to every new medicine approved by the FDA from 2010 through 2016. The threat of tariffs, combined with potential disruptions to NIH funding, could have far-reaching consequences for the pharmaceutical industry and its ability to develop new treatments.