Overview
On April 2, 2026, President Trump issued a proclamation under section 232 tariff authority imposing sweeping new tariffs on patented pharmaceutical products and ingredients imported into the U.S., with rates reaching up to 100 percent and taking effect as early as July 2026 for certain companies.
The implementation timelines and rates vary depending on the importing company’s size, product country of origin, and trade deals with partners. Companies identified in Annex III will face tariffs beginning July 31, 2026, while all other covered companies will become subject to the tariffs on September 29, 2026.
The proclamation is implemented through Annexes I–IV, which define covered products, exclusions, company‑specific treatment, and available relief mechanisms, and are summarized below.
Tariff Rates for Covered Products
The default tariff rate on patented pharmaceuticals and ingredients shall be 100 percent. However, exceptions to this include:
- Products of companies that have “onshoring plans” approved by the secretary of commerce shall be assessed a tariff rate of a 20 percent, which shall increase to 100 percent on April 2, 2030.
- Companies that have entered into pharmaceutical pricing agreements shall be assessed a tariff rate of zero percent until January 20, 2029 per the terms of the agreements.
- Products from some countries that have recently negotiated trade deals with the U.S., including the European Union, Japan, Switzerland, and Liechtenstein, shall be assessed a tariff rate of 15 percent, while the UK is assessed a tariff rate of 10 percent.
Products Excluded From Section 232 Tariffs on Pharmaceuticals
Generic and biosimilar pharmaceuticals, as defined in Annex I, shall not be subjected to the 232 tariffs. “Specialty pharmaceutical products” are also exempt. This includes:
- Orphan drugs;
- Nuclear medicines;
- Plasma derived therapies;
- Fertility treatments;
- Cell and gene therapies;
- Antibody drug conjugates;
- Medical countermeasures; and
- Others identified by the secretary of commerce, as well as products for animal health if they are from trade deal countries or meet an urgent U.S. health need.
What Does This New Tariff Mean for Importers of Patented Pharmaceuticals?
Importers of patented pharmaceutical products should begin assessing their exposure immediately and consider whether they qualify for available relief mechanisms. The proclamation establishes several mechanisms by which companies can reduce or eliminate their tariff exposure. For example, the Commerce Department and the Department of Health and Human Services shall establish the criteria for companies to enter into “onshoring plans” and pharmaceutical pricing agreements. The Commerce Department may also designate drugs for exclusion from the tariffs. These undoubtedly provide importers with several avenues to mitigate or reduce their tariffs exposure.
Should importer have questions regarding these duty mitigation steps reach out to us. In the meantime, we will continue to keep you updated should new developments become available.
