President Donald Trump has imposed a 100% tariff on patented pharmaceutical products and their ingredients, escalating a multiyear push to shift drug manufacturing to the U.S., according to an April 2 White House news release.
The move follows a Section 232 investigation that found pharmaceutical imports threaten U.S. national security by increasing reliance on foreign supply chains. The White House said the policy has already driven about $400 billion in new investment commitments from pharmaceutical manufacturers.
Here are six things to know:
1. Tariffs will phase in over four to six months: The tariffs will take effect in 120 days for large companies and 180 days for smaller firms.
2. Some trade partners face lower rates: Products from the European Union, Japan, Korea, Switzerland and Liechtenstein will be subject to a 15% tariff.
3. Companies can lower or eliminate tariffs through agreements: Drugmakers that enter into both most favored nation pricing agreements with HHS and onshoring agreements with the Commerce Department will qualify for a 0% tariff through Jan. 20, 2029. Companies that commit only to onshoring will face a 20% tariff.
4. Generics and some specialty drugs are exempt for now: Generic drugs and biosimilars are not currently subject to tariffs, though the policy will be reassessed in one year. Certain specialty drugs, including orphan products, may also be exempt under specific conditions.
5. A Supreme Court ruling preserved pathway for action: A Feb. 20 Supreme Court ruling limited the administration’s use of emergency tariff powers but left Section 232 authority intact, allowing pharmaceutical-specific tariffs to move forward.
6. The policy builds on earlier tariff proposals: The move follows 2025 proposals to impose similar tariffs on branded drugs and broader signals that levies could reach as high as 250% as part of a phased strategy to reshore manufacturing.
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
