Trump tariffs hit patented drugs with 100% rate

The Trump administration said on Thursday it will impose a 100% tariff on patented pharmaceutical drugs, a move it described as designed to push manufacturers to cut prices and shift production to the United States. Officials said the policy targets branded medicines as well as their active ingredients. The administration said the tariffs would take effect within 120 to 180 days, with timing varying by company size.

 

Under the framework outlined by the administration, companies can face lower rates if they make specific commitments tied to U.S. manufacturing and pricing. Officials said a 20% tariff rate would apply to companies that commit to domestic manufacturing. The administration also said it would offer a full exemption from the tariffs to companies that both onshore manufacturing and enter into “most-favored nation” pricing agreements with the White House.

 

The administration said pharmaceutical companies in Japan, South Korea, Switzerland, and the European Union that do not enter into such arrangements would face lower tariff rates that align with existing trade agreements. Officials presented the approach as a way to differentiate between firms based on their willingness to make U.S.-focused manufacturing and pricing commitments, while keeping some tariff treatment consistent with current trade terms for certain partners.

 

The announcement follows months of tariff threats, which officials said had already resulted in 13 drug companies establishing pricing deals with the administration. The administration said the new tariff structure is expected to further encourage voluntary pricing agreements and spur additional investment in U.S. manufacturing. Officials also pointed to major pharmaceutical hubs including China, Singapore, and India as places where the policy could influence future manufacturing decisions.

 

Not all categories of medicines are covered in the same way. Officials said tariffs on generic drugs and biosimilars will be revisited in one year, leaving uncertainty about the longer-term treatment of those products. The administration did not provide additional details in the announcement about how the one-year reevaluation would be conducted.

 

Alongside the pharmaceutical measures, the administration said it adjusted existing tariffs on aluminum, steel, and copper. Officials said the 50% tariff rate for those metals would be calculated based on the price paid by American buyers rather than declared production costs, a change the administration said is intended to counter alleged under-invoicing by foreign exporters. The administration framed the metals adjustment as an enforcement-oriented update to how tariff liability is determined.