Trump's 100% tariff on branded drug imports spares Big Pharma

President Donald Trump unexpectedly said on Thursday in a social media post that, beginning Oct. 1, the United States will impose a 100% tariff on imported branded or patented drugs.

The absence of details makes it challenging to evaluate the effect on individual companies, but several exemptions could dull the impact of the new levy, particularly for large drug manufacturers.

According to the online announcement, the tariffs will not apply to generics or companies "building their pharmaceutical plant in America," with the president defining "building" as "breaking ground" or "under construction."

Many of the largest global drugmakers already have U.S. manufacturing sites or are planning to build them.

Over the past year, numerous drugmakers have begun bracing for tariffs by pledging to invest more than $350 billion in manufacturing, researching and developing drugs within the United States.

Pharma giants like GSK and AstraZeneca are among the companies planning to build new U.S. facilities.

The move also excludes drugs imported from Japan and the European Union, which reached trade agreements earlier this year that cap branded medications at 15%. Countries that have yet to set rates, such as the United Kingdom, are expected to face the full 100% tariff.

While a 100% tariff sounds steep, it is lower than the 250% proposal Trump threatened in August.

It is unclear if the announced tariffs will shield the industry from any future tariffs associated with the ongoing Section 232 investigation, affecting countries like China, Vietnam and Malaysia.

Although Trump's pharma tariffs appear to benefit companies expanding U.S. production, they put significant pressure on smaller manufacturers that lack the resources to do so. Industry experts have warned that high trading costs would eat into innovation budgets, slowing R&D and delaying new therapies.

Alivia Kaylor is a scientist and the senior site editor of Pharma Life Sciences.