The 100% Section 232 tariff on patented pharmaceuticals and associated pharmaceutical ingredients took full effect Sept. 29 for companies not already covered under the July 31 implementation date.
The Commerce Department’s Bureau of Industry and Security has defined which specialty pharmaceutical products can qualify for a 0% tariff rate and which jurisdictions are eligible for the exemption.
Here are three things to know:
- Certain specialty product categories can qualify for the zero rate: drugs for which all approved indications are designated as orphan, nuclear medicines, plasma-derived therapies, fertility drugs, cell therapy products, gene therapy products, antibody drug conjugates, medical countermeasures for chemical, biological, radiological or nuclear threats and animal healthcare products. To receive the zero rate, the products must come from an eligible jurisdiction or be determined by Commerce to meet an urgent U.S. health need.
- The notice lists 20 eligible jurisdictions, including the European Union, Japan, India, the United Kingdom, Switzerland and South Korea. Specialty pharmaceutical products from these jurisdictions can qualify for the zero rate under current or forthcoming trade and security framework agreements.
- Companies can also apply directly to Commerce for a zero-tariff exemption for covered specialty pharmaceutical products by demonstrating an “urgent U.S. health need.” Applications can include details on the disease treated, available alternative therapies and the number of U.S. patients who rely on the product. Commerce said it will make individual, fact-specific, company-specific decisions for each request in consultation with USTR and HHS.
