US Pharma Tariffs: 100% Headline Rate, Far Lower Real-World Impact

• The 100% tariff applies only to patented pharmaceuticals and APIs; generics, biosimilars, and a broad list of specialty categories are currently exempt.
• Companies with approved US onshoring plans face a 20% rate until April 2030; those with executed MFN pricing deals pay zero tariffs until January 20, 2029.

President Trump signed a proclamation on April 2, 2026, imposing a 100% tariff on imported patented pharmaceuticals and active pharmaceutical ingredients under Section 232 of the Trade Expansion Act of 1962—but the list of exceptions is long enough that the effective rate for most drug imports will land well below the headline number.

The tariffs take effect September 29, 2026 for most companies, and July 31 for the 16 large drugmakers already engaged in the first wave of Most Favored Nation pricing negotiations, according to the White House proclamation. The administration’s justification, per the proclamation, is that pharmaceutical imports “threaten to impair the national security and economy”—citing FDA data showing that as of 2025, 53% of patented medicines distributed in the US were produced overseas, with only 15% of patented APIs by volume domestically manufactured.

What’s Exempt

The carve-outs cover a substantial share of the market. Generics and biosimilars—which account for over 90% of US prescriptions filled, according to reporting by CID—are exempt for now, with the administration required to reassess their status within one year. Also excluded from tariffs, per the proclamation, are orphan drugs (where all approved indications carry orphan designation), nuclear medicines, plasma-derived therapies, fertility treatments, cell and gene therapies, antibody-drug conjugates, medical countermeasures for CBRN threats, and pharmaceutical products for animal health—provided they originate from a country with a trade and security framework agreement with the US, or meet an urgent domestic health need.

On the country side, products from the EU, Japan, South Korea, Switzerland, and Liechtenstein face a 15% tariff under existing trade deals. UK-manufactured drugs currently face a 10% tariff, according to the proclamation, with the rate set to reduce to zero to the extent required by the US-UK pharmaceutical partnership agreement. The UK is the first country to secure a pathway to a zero percent rate on US pharmaceutical export tariffs, with NHS patients receiving improved access to novel treatments in return, as a result of medicines pricing changes.

The MFN and Onshoring Tracks

Companies can access two additional lower-rate pathways. Those with Secretary of Commerce-approved onshoring plans—committing to move production to the US—qualify for a 20% tariff rate, which rises to 100% on April 2, 2030, the proclamation states. Companies that have both an approved onshoring plan and a fully executed MFN pricing agreement pay zero tariffs until January 20, 2029. The administration said it will monitor onshoring commitments through periodic progress reports, and the proclamation explicitly authorizes retroactive tariff reimposition in cases of fraud or misrepresentation.

The White House stated that the threat of tariffs has already driven $400 billion in pharmaceutical investment commitments from industry. Examples include Johnson & Johnson’s $55 billion US manufacturing commitment through 2029 and CSL’s $1.5 billion expansion at its Kankakee, Illinois plasma-derived therapies facility.