Exemptions include generic drugs and companies that have committed to building manufacturing plants in the United States.
President Donald Trump has announced a new pharmaceutical tariff that would impose as much as 100% on imported brand-name drugs.
The executive order, announced Thursday, is to spur the production of pharmaceuticals in the United States.
Exemptions are for generic drugs and companies that have already pledged to build manufacturing facilities in the United States. Pharma companies that lower prices would be subject to a 20% tax.
“I have determined that it is necessary and appropriate to impose a 100 percent ad valorem duty rate on the import of patented pharmaceuticals and associated pharmaceutical ingredients …” Trump said in Thursday’s proclamation. “I have determined that it is necessary and appropriate that the ad valorem duty rate be 20 percent on imports of patented pharmaceuticals and associated pharmaceutical ingredients produced by companies that have plans, approved by the Secretary, to onshore production of such pharmaceuticals and pharmaceutical ingredients.”
The 20% rate will increase to 100% four years after the date of the proclamation, Trump said.
No tariffs would be imposed on imports of patented pharmaceuticals and associated pharmaceutical ingredients produced by companies that have fully executed agreements or are negotiating agreements with the Secretary and the Secretary of Health and Human Services regarding Most Favored Nation pricing and onshoring of production.
“Such agreements further United States economic and national security interests by making pharmaceuticals more accessible and affordable in the United States and by strengthening the domestic manufacturing base,” Trump said.
Pharmaceutical Research and Manufacturers of America (PhRMA) President and CEO Stephen J. Ubl responded by statement: “Tariffs on cutting-edge medicines will increase costs and could jeopardize billions in U.S. investments announced in the last year. Every dollar spent on tariffs is a dollar that can’t be invested in communities across the country.
“The innovative biopharmaceutical sector has a robust U.S. manufacturing footprint. In fact, two-thirds of the medicines that are consumed in the U.S. are made in America. And when innovative medicines or their inputs are sourced from other countries, these products overwhelmingly come from reliable U.S. allies, like Europe and Japan.”
Biopharmaceutical innovation has delivered $1.7 trillion in economic impact, supported 5 million American jobs and provided patients with the access to new medicines, he said.
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