Adjusting Imports of Pharmaceuticals and Pharmaceutical Ingredients into the United States

Key Points

• Trump is imposing a 100% tariff on imported brand-name (patented) drugs and their active ingredients, using national security authority under Section 232 of the Trade Expansion Act. The goal is to push drug companies to move production to the United States so the country is not dependent on foreign supply chains for critical medicines.
• Companies that submit approved plans to bring manufacturing back to the U.S. can qualify for a lower 20% tariff rate. If they also agree to charge Americans the lowest price they offer anywhere in the world (Most Favored Nation pricing), the tariff drops to zero until January 20, 2029.
• The order highlights that over half of brand-name drugs and 85% of active pharmaceutical ingredients used in the U.S. are made overseas, creating a vulnerability if global supply chains are disrupted by conflict or crisis.
• Generic drugs, which most Americans use, are completely exempt from these new tariffs. Certain specialty treatments are also exempt, including orphan drugs for rare diseases, nuclear medicines, fertility treatments, cell and gene therapies, and animal health products.
• Countries that already have trade deals with the U.S. get special lower rates: 15% for the EU, Japan, South Korea, and Switzerland; 10% for the UK (dropping to zero once a pricing deal is finalized). The tariffs take effect July 31, 2026, for some companies and September 29, 2026, for the rest.

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