President Donald Trump’s latest escalation in his drug pricing campaign could soon impose steep costs on imported medicines, even as a tangle of exemptions may shield large parts of the pharmaceutical market. Beginning October 1, all branded or patented pharmaceutical products brought into the United States will face a 100% tariff, according to a late Thursday announcement Trump made on Truth Social.
The order comes as the White House pushes its “most favored nation” plan demanding drugmakers match lower prices offered abroad. Pharmaceutical imports into the U.S. reached roughly $213 billion in 2024, nearly triple the level from a decade earlier, according to United Nations Comtrade data. Analysts say the scope of the tariffs—combined with uncertainty over exemptions—could ripple across global supply chains.
“With Asia alone accounting for just over 20% of those imports by value, U.S. consumers could see a ‘meaningful commercial hit,’” wrote Louise Loo, head of Asia economics at Oxford Economics, in a note to clients.
U.S. spending on prescription drugs is already among the highest in the developed world. Previous studies cited in the reporting show Americans pay about twice as much per capita as patients elsewhere. Trump has vowed to reverse that imbalance, claiming in July that he would “get Americans the best prices in the world for prescription drugs” by forcing major firms to match their lowest international prices.
Industry leaders, however, argue the new duties will backfire. “Every dollar spent on tariffs is a dollar that cannot be invested in American manufacturing or the development of future treatments and cures,” said Alex Schriver, senior vice president for PhRMA, the pharmaceutical industry’s primary lobbying group. “Medicines have historically been exempt from tariffs because they raise costs and could lead to shortages.”
Despite those warnings, the actual effect on patients may be smaller than the headline number suggests. The Food and Drug Administration says generic medicines account for nine out of ten prescriptions filled in the U.S., and generics are exempt from the tariff. Trump also specified that companies with existing or planned U.S. manufacturing sites would avoid the new duties, a carve-out covering many of the world’s largest drugmakers.
“Many pharmaceutical companies have facilities in the U.S., so it may be relatively easy to superficially expand those facilities to avoid tariffs being applied,” said Paul Donovan, chief global economist at UBS Global Wealth Management. Analysts at JPMorgan reached a similar conclusion: “While there remains very limited details, we note that this will likely lead to a majority of pharma products being excluded from any tariffs.”
Evidence of that shift is already visible. The White House maintains a “running list of new U.S. investment” showing at least 15 drugmakers with plans to expand production or research domestically, some pledging tens of billions in new facilities. Roche, for example, has pointed to upgrades in Kentucky, Indiana, New Jersey, and California. Novartis said in a statement: “We are working to ensure that all major Novartis medicines for U.S. patients are manufactured in the U.S. The announced 100% tariff should not have an impact.”
International suppliers are also navigating the new rules. The European Union, which provides about 60% of U.S. pharmaceutical imports, insists its products will remain capped at a 15% tariff level under an earlier deal struck this summer. “This clear all-inclusive 15% tariff ceiling for E.U. exports represents an insurance policy that no higher tariffs will emerge for European economic operators,” a European Commission spokesperson told NBC News on Friday. Ireland, which alone accounts for 24% of American pharmaceutical imports, is “studying the impact of this announcement,” said Deputy Prime Minister Simon Harris, though he also indicated confidence the cap would apply.
While the immediate shock may be softened by exemptions, companies have also stockpiled drugs ahead of the deadline. “We think there may have been significant inventory accumulation this year,” said Neil Shearing, group chief economist with Capital Economics. That could delay any price changes consumers see at the pharmacy counter.
Still, critics argue the tariffs are a distraction from more serious reforms. “Raising drug prices abroad will do absolutely nothing to lower them at home, and of course drugmakers have not lowered prices on their own,” said Peter Maybarduk, director of Public Citizen’s Access to Medicines program. “Making medicine affordable and reliably available depends on public investment and serious legislation, not tariff chaos and bullying countries that have the good sense to negotiate affordable prices for their people.”
Melinda St. Louis, who leads Public Citizen’s Global Trade Watch, warned that the policy opens the door to corporate abuse. “Trump is continuing his pattern of grabbing headlines using the word ‘tariff] while engaging in secretive ongoing negotiations and opaque exemptions processes that are ripe for corporate corruption,” she said. “While strategic tariffs can be used to support domestic manufacturing and good jobs, they must be paired with real public investments and support for workers’ rights, which Trump has systematically undermined.”
The administration says the duties are tied to a Commerce Department Section 232 national security investigation of pharmaceutical imports, though the public has not seen the underlying justification. Critics note that medicines have historically been excluded from such measures precisely to avoid shortages or price spikes.
Trump’s plan to wield tariffs as leverage underscores his broader strategy of high-profile pressure tactics on the pharmaceutical industry. Whether consumers see lower prices—or instead face new barriers to affordable treatment—remains uncertain as the new system of exclusions, caps, and stockpiles comes into force next week.
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