The White House announced new tariffs on patented pharmaceutical products and certain ingredients under Section 232 of the Trade Expansion Act, citing national security and public health concerns. The measures include different tariff rates, phase-in timelines, and potential pathways for reduced tariffs tied to U.S. onshoring and pricing agreements.
What was announced
- Tariff rate: A 100% tariff on patented pharmaceutical products and certain ingredients.
- Phase-in: The tariffs will take effect in 120 days for certain large companies (12:01 am ET on July 31, 2026) and 180 days for smaller companies (12:01 am ET on September 29, 2026).
- Exceptions: The announcement indicates a 15% tariff for products from the European Union, Japan, Korea, Switzerland, and Liechtenstein; it also indicates a lower tariff for products from the United Kingdom under a separate UK pharmaceutical agreement. Reduced rates are also available for companies with a qualifying onshoring plan.
- Generics and biosimilars: Not subject to tariffs at this time, with reassessment indicated in one year.
- Exemptions and enforcement: Certain specialty products (including orphan drugs and some animal health products) are described as exempt under stated conditions, and the proclamation indicates monitoring and enforcement mechanisms including external audits and potential tariff increases.
The tariffs follow a Section 232 investigation, which concluded that patented pharmaceuticals and associated ingredients are being imported in ways that could threaten national security, and that greater domestic manufacturing capacity is important for both defense requirements and public health resilience.