Trump signs order imposing 100% tariffs on specific imported drugs

WASHINGTON — President Trump this month imposed 100% tariffs on branded drugs from pharmaceutical companies that have not reached deals with the administration to cut their U.S. prices.

The United States’ heavy reliance on imports threatens to limit domestic access to life-saving medications “in the event of global supply chain disruption due to geopolitical or economic disruption,” Trump’s order says.

The order — part of an administration effort to spur domestic drug production — notes that about 53% of patented drugs distributed in the U.S. are produced abroad.

The action, which will probably impact few drug makers, was taken after a Commerce Department investigation into the effects on national security of imports of pharmaceuticals, pharmaceutical ingredients and related products.

The probe resulted in an exemption from tariffs for generic and biosimilar imports, a decision that was hailed by the Association for Accessible Medicines (AAM).

“We are especially grateful to the administration for working with AAM and the Biosimilars Council along with our member companies over the last year to discuss the unique aspects of the generics ecosystem and explore ways to strengthen the resiliency of the overall supply chain as well as enhance the ability of the industry to grow here in the U.S.,” said association president and chief executive officer John Murphy III. 

“There was a clear appreciation and understanding of the savings and access provided to American patients, as well as the potential harms and unintended consequences associated with further burdening the economics of our industry in the U.S.,” Murphy said.

White House officials noted that there are routes for drug companies to lessen or bypass the tariffs. A 20% tariff will be levied on drug makers that plan onshore manufacturing, which would rise to 100% four years from now.

Companies that have struck drug pricing deals or are in talks with the government and are building U.S. manufacturing plants would be exempt from the tariffs. New plants must be finished by January 2029.

Thirteen big pharma companies, including Pfizer, Eli Lilly and Novo Nordisk, have agreed to pacts with the White House to reduce the prices of new and existing drugs. The deals are part of President Trump’s “most favored nation” policy, which links domestic drug prices to less costly ones abroad, and exempts the companies from tariffs for three years. Talks with four other companies are ongoing, the administration said.

Bigger companies have four months before the 100% tariff rate takes effect, and the administration anticipates more drug makers coming up with reshoring plans before the deadline. Smaller companies, which depend on contract manufacturers, have six months before the new tariff hits.

Lower drug tariffs will apply to some countries that have trade deals with the U.S., with a 15% rate for the European Union, Japan, South Korea and Switzerland. The U.K. will see a 10% tariff. 

Some specialty drugs, including treatments for rare conditions, will not be hit with tariffs if they are from countries with trade deals or “meet an urgent public health need,” the White House said.