The Trump administration is drafting a plan to impose tariffs of up to 100% on certain imported branded pharmaceuticals from companies that haven't negotiated price-lowering deals with the U.S. government.
Tariff Proposal Overview
- According to a draft document obtained by CNBC, patented medications and their active ingredients would face a 100% tariff.
- Companies can reduce or avoid tariffs by moving manufacturing to the U.S. or by negotiating deals with the administration.
- The proposal is not final and may be announced as soon as Thursday, per some reports.
Exemptions and Negotiated Deals
- Since November, over a dozen major drugmakers, including Eli Lilly, Pfizer, and Novo Nordisk, have inked deals to lower drug prices.
- These agreements are part of President Trump's "most favored nation" policy, which links U.S. prices to lower international prices.
- Companies with fully executed deals or those currently negotiating with Health and Human Services are exempt from tariffs for three years.
Detailed Tariff Structure
- A 20% tariff will be imposed on companies that plan to onshore production, increasing to 100% four years later.
- Separate tariff rates apply to the EU, Japan, South Korea, Switzerland, and the U.K. based on bilateral agreements.
- Generic drugs will incur zero additional tariffs under the draft plan.
Sources and Status
- The plan was first reported by Bloomberg and obtained by CNBC.
- The White House has not yet responded to requests for comment on the draft tariff plan.