United States announces 100% Section 232 tariff on patented pharmaceutical and their ingredients
Exceptions for countries with which United States currently has trade agreements or that enter into trade agreements
President Trump today signed an executive order imposing a 100% tariff under Section 232 on patented pharmaceuticals and their ingredients, to come into effect in 120 days for certain large companies and 180 days for smaller companies.
According to a White House release, pharmaceutical products from countries with which the United States currently has trade agreements, or that may enter into trade agreements, will be subject to lower tariff rates.
- If a pharmaceutical product is from the EU, Japan, Korea, Switzerland, or Liechtenstein, a 15% tariff will apply.
- If a pharmaceutical product is from the United Kingdom, a lower tariff will apply, subject to the recently concluded UK pharmaceutical agreement.
- For companies that enter into most favored nation (MFN) pricing agreements with the Department of Health and Human Services (HHS) and onshoring agreements with the Department of Commerce, a 0% tariff will apply through January 20, 2029.
- For companies that only enter into onshoring agreements with the Department of Commerce, a 20% tariff will apply.
Generic pharmaceutical products, biosimilars, and associated ingredients are not subject to tariffs at this time, but that will be reassessed in one year. In addition, orphan drugs, drugs for animal health, and certain other specialty pharmaceutical products will be exempt, if they are from trade deal countries or meet an urgent public health need.