The Trump administration on Thursday imposed new tariffs on brand-name drugs from companies that don’t have a deal with the president to lower U.S. drug prices, a long-awaited move that is likely to affect only some drug companies.
“We need to make sure that our medical supplies are protected, safe and domestic,” a senior government official, who declined to be named, told reporters Thursday. “That’s what we’re doing.”
Under the plan, patented medicines and their active ingredients would be subject to 100% tariffs, but drug companies have avenues to reduce or avoid the tariffs, officials said.
The administration plans to impose a 20% tariff on companies that plan to produce domestically, raising it to 100% in four years. Pharmaceutical companies that have fully implemented drug pricing agreements or are currently negotiating with the Department of Health and Human Services and are building domestic manufacturing will be exempt from tariffs. According to the person, new domestic factories must be completed by January 2029 to qualify.
The official said Big Pharma has 120 days before 100% tariffs go into effect, but the administration expects more companies to announce reshoring plans by then. Smaller pharmaceutical companies that rely on contract manufacturers have 180 days to reach this rate.
Meanwhile, some countries with larger trade deals with the U.S. will face different drug taxes, with the European Union, Japan, South Korea and Switzerland at a rate of 15%. The official said Britain would face a 10% tariff, in part because the British government had increased the price of medicines.
“Those countries have larger trade deals with the United States, so production can stay in those countries,” the official said.
The plan represents another shift in President Trump’s aggressive trade strategy, more than a month after the Supreme Court struck down the president’s 2025 global tax that excluded the pharmaceutical industry. The sector-specific tariffs were introduced following a Department of Commerce investigation that determined that certain pharmaceutical imports pose a national security risk to the United States.
U.S. President Donald Trump (center), along with Health and Human Services Secretary Robert F. Kennedy Jr. (R) and National Institutes of Health (NIH) Director Jayanta Bhattacharya (left) speak at a press conference about prescription drug prices in the Roosevelt Room of the White House on May 12, 2025, in Washington, DC.
Jim Watson | AFP | Getty Images
Since November, more than a dozen major pharmaceutical companies, including: Eli Lilly, pfizer and novo nordisksigned a deal with President Trump to lower the prices of new and existing drugs. These agreements are part of the president’s “most-favored-nation” policy, which ties U.S. drug prices to lower drug prices overseas and provides companies with three years of tariff exemptions.
Trump administration officials said 13 companies have already signed drug pricing agreements and negotiations are progressing with four other drug companies. The official added that during President Trump’s term, manufacturing reshoring efforts in this sector have already reached $400 billion.
Ahead of the landmark drug price deal, President Trump repeatedly threatened to impose tariffs on drug imports. These threats, and efforts to curry favor with the president, stimulated a new wave of pharmaceutical industry investment in U.S. manufacturing. These efforts were undertaken at a time when domestic pharmaceutical manufacturing was significantly curtailed.
