Starting October 1, 2025, the U.S. will impose a 100% tariff on all imported branded or patented pharmaceutical products, except for those companies that are building pharmaceutical manufacturing plants within the United States. This tariff affects a broad range of brand-name drugs, but generic drugs are mostly exempt. Additionally, companies with ongoing construction of new U.S. manufacturing facilities will also be exempt from these tariffs. Key points:
- The 100% tariff applies to branded or patented pharmaceutical products imported into the U.S. except where a company is building a U.S. plant.
- Generic drugs, which make up about 90% of U.S. prescriptions, are likely exempt from the tariff.
- Major pharmaceutical companies like Johnson & Johnson, Eli Lilly, Merck, and Gilead Science are investing in U.S. manufacturing plants to avoid the tariff.
- The tariff aims to boost domestic manufacturing of pharmaceuticals in the United States.
- Drugs manufactured within the U.S. or under construction plants are not subject to the tariff.
- European Union pharmaceuticals are subject to a capped tariff of 15% under a separate trade agreement.
This tariff policy is focused on branded and patented pharmaceuticals, aiming to reshape supply chains through promoted domestic manufacturing, while sparing generics and incentivizing new U.S. production facilities.
