Trump Administration Imposes 100% Tariffs on Select Patented Drugs

President Donald Trump issued an order that imposes a 100 % tariff on certain patented pharmaceutical products and ingredients. The measure takes effect this week and is intended to encourage domestic drug manufacturing. The administration argues that higher tariffs will pressure companies to expand U.S. production and route sales through the TrumpRx direct-to-consumer clearinghouse.

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The tariff schedule is tiered. Products from the European Union, Switzerland, Japan and South Korea face a 15 % duty, while those from the United Kingdom are exempt. Companies that have pledged to increase U.S. output are subject to a 20 % tariff. Large manufacturers that have signed “Most Favored Nation” (MFN) agreements are exempt from the 100 % rate and must provide lower-priced drugs to Medicaid and TrumpRx. Generic medicines, orphan drugs for rare diseases, and many specialty products are also largely exempt. A preliminary analysis by the Brookings Institution identifies more than 100 drugmakers with at least one non-exempt product; a majority of these firms rely on contract manufacturers and lack any domestic production facilities.

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She adds that smaller companies “don’t have deep pockets” and may be forced to sell to larger rivals. International trade lawyer Mollie Sitkowski of Faegre Drinker predicts that prices for affected medicines will likely rise and that the pipeline of new drugs could shrink in coming years.

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The Commerce Department’s implementation reflects the administration’s push for greater domestic supply, while the Biotechnology Innovation Organization (BIO)—which represents smaller and mid-sized drugmakers—has warned the Commerce Department that the tariffs “punish U.S. innovators” and risk slowing investment. BIO’s CEO John Crowley argues that the policy will raise costs, impede manufacturing, and divert resources away from research and development.

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• “The reality is that tariffs on America’s medicines will raise costs, impede domestic manufacturing, and divert scarce resources away from research and development critical to maintaining American biotech leadership,” — John Crowley, BIO’s CEO

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