The Trump administration targets foreign pharmaceutical dependency with steep import duties, offering exemptions only to companies that relocate production or agree to government pricing controls—leaving smaller drugmakers struggling to navigate the new two-tiered system.
US President Donald Trump has signed an executive order imposing sweeping tariffs on imported patented pharmaceuticals, with rates reaching 100% for most products not manufactured domestically. The measure, formalised through a proclamation issued on 2 April 2026, aims to strengthen national security and reduce American dependence on foreign pharmaceutical supply chains.
The White House also issued a Fact Sheet on 2 April 2026, concerning the matter.
Under the new policy, branded drugs imported into the US will face a default tariff of 100% unless manufacturers commit to moving production domestically or enter into government pricing agreements.
However, the administration has carved out preferential rates for certain trading partners: 15% for products from the European Union, Japan, South Korea, Switzerland and Liechtenstein, and 10% for goods from the United Kingdom, reflecting earlier bilateral trade arrangements.
Exemptions and reduced rates
Companies willing to relocate manufacturing to the US can qualify for a reduced 20% tariff rate, though this will increase to 100% on 2 April 2030. Firms that also sign Most Favoured Nation pricing agreements with the Department of Health and Human Services can secure complete tariff exemption through 20 January 2029.
The tariffs will take effect on 31 July 2026 for large pharmaceutical companies, which have 120 days to announce their compliance plans. Smaller companies have been granted 180 days, with implementation beginning on 29 September 2026.
Generic drugs, biosimilars and their ingredients remain exempt for at least one year, a significant provision considering that over 90% of medicines sold in the US are generics, according to the FDA.
Certain orphan drugs, veterinary products and other speciality pharmaceuticals may also qualify for exemptions if they meet urgent public health needs or originate from countries with existing trade agreements.
