The United States announces a 100% tariff increase on imported patented drugs and pharmaceutical ingredients.

The U.S. White House issued an announcement on the 2nd, saying that on that day, U.S. President Trump signed a document under Section 232 of the Trade Expansion Act of 1962, which will impose a 100% tariff on imported patent drugs and pharmaceutical ingredients. The measure also provides a pathway for exemptions or tariff reductions, aiming to pressure pharmaceutical companies to reach agreements with the White House on drug pricing and industrial reshoring.

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Lock in 100% tariffs! Trump “targets” imported patent drugs and pharmaceutical ingredients

According to CCTV News, the White House announced on Thursday local time (the 2nd) that the U.S. government will impose a 100% tariff on some imported medicines.

In an announcement released by the White House that day, U.S. President Trump signed a document under Section 232 of the Trade Expansion Act of 1962, under which the U.S. will impose a 100% tariff on imported patent drugs and pharmaceutical ingredients. The measure also provides a pathway for exemptions or tariff reductions, aiming to pressure pharmaceutical companies to reach agreements with the White House on drug pricing and industrial reshoring.

Here are some details mentioned in the announcement above:

The U.S. will impose a 100% tariff on patent drug products that are manufactured outside the United States and not included in drug pricing agreements;

Large pharmaceutical companies will have 120 days to publish relevant plans to avoid tariffs, while smaller companies will have 180 days;

Companies can shift production to the United States in exchange for lowering the tariff to 20%;

Pharmaceutical companies that shift production to the U.S. mainland and sign a Most Favored Nation pricing agreement with the U.S. Department of Health and Human Services will not need to pay tariffs. The U.S. has already reached such agreements with 17 pharmaceutical companies—13 have been officially confirmed, and 4 agreements are still under negotiation;

Because of existing trade agreements, tariffs on medicines produced in the EU, Japan, South Korea, and Switzerland will be reduced to 15%. The UK, meanwhile, has a separate tariff agreement.

At present, there will be no adjustment to the import of generic drugs and related ingredients (including biosimilars), but Trump has asked the U.S. Department of Commerce to reassess the relevant products within a year. This leaves room for future taxation, depending on how much production is actually brought back to the U.S.

The latest measure undoubtedly fulfills Trump’s threats last autumn—if companies do not shift production to the United States, they will face a 100% tariff on brand-name drugs or patent drugs. But at the same time, it can be seen that the above policy includes multiple exception clauses, which may weaken its impact. In fact, most of the world’s major global pharmaceutical companies, including Merck and Eli Lilly, have already reached agreements with the government, thereby avoiding punitive measures.

The industry group “Mid-Atlantic Biotechnology Alliance” (MBAA) said this executive order could create an “unfair double exemption system,” benefiting only those big companies that have already secured Most Favored Nation treatment agreements with Trump.

MBAA president Alanna Temme said in a statement that mid-sized pharmaceutical manufacturers “lack a diversified portfolio of products to absorb these sudden increases in costs.”

In fact, Trump has been pressuring pharmaceutical companies through his Most Favored Nation drug pricing policy, demanding that they cut drug prices to the same level as in other high-income countries. U.S. patients spend far more on prescription drugs than patients in other countries—typically about three times the price that patients in other developed countries pay.

Meanwhile, due to other price increases related to tariffs, and because the war between the U.S. and Iran has driven up oil prices, the White House is facing increasingly urgent pressure to lower prices.

（Source: Xinhua News Agency）