On April 2, the Trump administration announced a new round of tariffs, this time affecting the branded pharmaceutical industry. The threat of 100% tariffs on patented drug products and their active ingredients has the industry seeking to understand the explanations and its several exemptions.
Yesterday, the White House issued a new set of tariffs on the pharmaceutical industry, charging the full list price of an imported brand-name or patented drug for certain companies and locations. In the face of the Supreme Court’s rejection of the president’s general global tariff authority, it seems unlikely that these tariffs will not be challenged.
Where Is the Evidence That Pharma Tariffs Will Shore-up Supply Chains and National Security?
In August 2025, President Trump signed an executive order seeking to bolster the pharmaceutical supply chain. It is doubtful that these new “Section 232” tariffs will have a positive effect on the drug supply chain, as any onshoring of new pharma production is a years-long process. Furthermore, these tariffs will be enforced for only specific companies, with several exemptions.
Enforcing tariffs on patented medicines and their agreements does virtually nothing to support national security, which is the goal of Section 232 of the Trade Expansion Act, under which the president still has specific tariff authority. In the White House’s fact sheet, the administration claims that “An investigation [by the Commerce Department] found that patented pharmaceuticals and associated pharmaceutical ingredients are being imported into the United States in such quantities and under such circumstances as to impair our national security.” This is an extremely vague and ambiguous claim, without any evidence (persuasive or otherwise) of a direct national security threat.
The Real Pharma National Security Threat
Simply because a pharmaceutical company sells a drug in the US but does not produce it here does not present a threat to national security. If that product was solely produced by an adversarial country, and there were no therapeutic alternative for that product, then you might be able to make a tenuous case, at best. Ironically, that situation might only truly exist in the face of a new pandemic; in that case, do you really want to double the cost of the potential life-saving treatment? The administration has strongly indicated its position against US mRNA vaccine research by severely cutting funding. I’m guessing that the Trump administration would have to give that country an exemption faster than he could post to Truth Social.
It’s All About the MFN Agreements
There are plenty of exemptions to these new tariffs, the dominant one is that for companies that had reached most favored nation (MFN) agreements with the administration. According to the White House, these companies are exempt from the new tariffs (for 3 yr). This strongly supports that the motive is not national security but about compelling pharmaceutical companies to come to heel. The exemptions undercut any claim that a Section 232 investigation applies to the pharmaceutical industry. It is again trying to leverage the government’s position to force pharmaceutical companies without MFN agreements to join the large group that have signed on already. The administration’s own deadlines don’t try to hide this fact: The tariffs will come into effect within 120 days for large companies that have not already forged agreements with the administration and 180 days for smaller companies to fall in line.
In addition to pharma companies that have agreements in place there are several other exemptions as well. For example, if a pharmaceutical product is from the EU, Japan, Korea, and Switzerland, a 15% tariff will apply. For pharmaceutical companies in the UK, which like the others also have existing pharmaceutical tariff deals, a lower tariff will be assigned. Companies that have entered onshoring agreements with the Department of Commerce for facilities to produce their pharmaceuticals in the US will be subject to a 20% tariff, which will increase over time. Orphan drugs are exempt, as are biosimilars and generics (however, the administration says that position will be reassessed one year from now).
Will this new Section 232 tariff make the rounds in federal court? It certainly should. It is about coercion, not about supply chains or national security.
