Trump Imposes 100% Tariff on Patented Pharmaceutical Imports

Donald Trump implemented a 100% tariff on specified patented pharmaceutical products and their associated ingredients on September 29, 2026. Invoking national security under Section 232 of the Trade Expansion Act of 1962, the administration aims to lower drug prices and incentivize the relocation of pharmaceutical manufacturing to the United States.

While generic medicines remain exempt, the U.S. Department of Commerce's Bureau of Industry and Security granted zero-tariff treatment to 20 jurisdictions, including India, Japan, the United Kingdom, and the European Union. These exemptions apply to high-value specialty therapies—such as orphan drugs, cell and gene therapies, and nuclear medicines—provided the originating country has a trade and security framework agreement with the U.S. or the product meets an urgent health need.

Large pharmaceutical companies have largely avoided the tariffs by securing waivers in exchange for increasing U.S. production and lowering Medicaid pricing. However, small biotech firms face significant financial risks due to their reliance on overseas third-party manufacturers. Industry concerns persist that the exemption application process will be slow, forcing smaller firms to pay tariffs upfront and divert capital from research and development, which may inadvertently benefit China's biotech industry. Some firms have also cited regulatory processes at the U.S. Food and Drug Administration as a barrier to rapidly constructing new domestic plants.