President Floats 200% Pharmaceutical Tariff

Topline

President Donald Trump suggested Tuesday his administration intends to impose a 200% tariff rate on pharmaceutical imports into the U.S., which would take effect in a year, a major fee that could affect some $200 billion in imports and raise prices on Americans’ medications if it takes effect.

President Donald Trump speaks during a cabinet meeting at the White House on July 8.

AFP via Getty Images

Key Facts

Trump said at a Cabinet meeting his administration intends to make an announcement “very soon” on pharmaceutical tariffs.

The proposal would give companies “about a year” to bring their manufacturing to the U.S. before the tariff is levied, which Trump suggested would be approximately 200%.

Pharmaceuticals are currently exempted from Trump’s sweeping “Liberation Day” tariffs on nearly all countries, though the president had previously threatened that he could impose additional tariffs on the sector.

If implemented, a sweeping tariff on pharmaceuticals could impact billions in imports: The U.S. imported $212 billion in pharmaceuticals in 2024, making it the 5th most imported product.

Trump also announced a 50% tariff on imports of copper Tuesday and suggested there could be more tariffs coming on specific products, such as semiconductor chips.

What To Watch For

It’s unclear when exactly the Trump administration could formally announce any pharmaceutical tariffs, and when they could take effect, given Trump suggesting there would be a year-long grace period first for manufacturing to move to the U.S.

How Will Pharmaceutical Tariffs Impact Consumers?

The exact impact any pharmaceutical tariffs would have on Americans’ medications still remains to be seen, particularly given there may be a lengthy period between when the tariffs get formally announced and when they take effect. Experts have previously suggested that levying tariffs on pharmaceuticals could lead to higher prices for Americans: John Murphy III, CEO of the Association for Accessible Medicines, said in an April statement that “tariffs … will only amplify the problems that already exist in the U.S. market for affordable medicines,” and industry experts told The New York Times in April that Americans could have to pay higher co-pays or out of pocket costs for their medications. The threat of tariffs have also sparked fears of potential drug shortages, with a report by the Brookings Institution noting foreign drug companies could respond to the increased cost from tariffs by exiting the U.S. market entirely. Eli Lilly CEO David Ricks, whose company manufactures such drugs as GLP-1 medications Mounjaro and Zepbound, has suggested tariffs could cause the company to reduce its investments in research and development, however, meaning there could also be broader impacts on creating new treatments for Americans’ health issues.

Which Medications Could Be Most Affected By Tariffs?

Generic drugs are most likely to face the brunt of the impact of any tariffs, the UNC Center for the Business of Health pointed out, given they operate on much lower profit margins than brand-name drugs that can more easily absorb extra costs from tariffs. The Brookings Institution notes controlled substances like opioids and ADHD medications will be less impacted, as they’re already largely manufactured in the U.S. due to additional restrictions, and nearly half of all generic injectible drugs like IV antibiotics, saline, chemotherapy agents, lidocaine, and epinephrine are also already produced domestically.

Which Countries Will Be Impacted By Pharmaceutical Tariffs?

The top countries that imported pharmaceuticals into the U.S. in 2024 were Ireland ($50.3 billion in imports), Switzerland ($19 billion), Germany ($17.1 billion), Singapore ($15.3 billion) and India ($12.5 billion), as compiled by the Observatory of Economic Complexity, a trade data platform aligned with MIT. While name-brand drugs are largely manufactured in the U.S. and Europe, generic drugs are primarily imported from India and China, the UNC Center for the Business of Health notes.

Key Background

Trump has made tariffs the centerpiece of his economic policy, levying sweeping tariffs on imported goods over the concerns of economists, who warn doing so will raise prices for consumers and harm the economy. In addition to the widespread “Liberation Day” tariffs Trump has imposed on nearly all countries, the president has also imposed a more limited set of sector-specific tariffs, such as on steel and automobiles. While the president carved out a specific exemption for pharmaceuticals in his “Liberation Day” tariffs, Trump has repeatedly suggested that tariffs could be coming for the industry, and Commerce Secretary Howard Lutnick claimed in April that pharmaceutical tariffs would be rolled out “in probably a month or two.” The Trump administration also announced in April an investigation into pharmaceutical imports and their impact on national security, which would be a step toward imposing tariffs. Trump then signed an executive order in May directing officials to “ensure” foreign countries that import pharmaceuticals are not “engaged in practices that purposefully and unfairly undercut market prices and drive price hikes in the United States.”