Trump prepares pharmaceutical tariffs of up to 100%

Key Points:

• The Trump administration is considering imposing new tariffs of up to 100% on patented drugs and active ingredients from pharmaceutical companies that have not made deals to lower U.S. drug prices.
• Companies that relocate manufacturing to the U.S. or negotiate pricing agreements with the administration could reduce or avoid these tariffs, with a proposed 20% tariff initially applied to those planning onshoring, increasing to 100% after four years.
• The tariffs would exempt drugmakers who have signed or are negotiating agreements under Trump's "most favored nation" policy, which links U.S. drug prices to lower prices abroad and currently exempts these companies from tariffs for three years.
• Generic drugs would not face additional tariffs, and different tariff rates would apply to imports from countries like the EU, Japan, South Korea, Switzerland, and the U.K., based on bilateral agreements.
• The proposal follows a Commerce Department investigation citing national security risks from certain pharmaceutical imports and comes after previous threats of tariffs spurred increased U.S. pharmaceutical manufacturing investments.