Pangaea Express: Section 232 tariffs announced on pharmaceuticals
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President Trump has issued 100% tariffs on imported patented pharmaceutical products with specific exemptions. The President is citing section 232 of the Trade Expansion Act of 1962 to bring in these tariffs as “the quantities and circumstances of imports of pharmaceuticals and pharmaceutical ingredients threaten to impair the national security and economy”.
The tariffs are effective: July 31, 2026 (120 days) for certain large companies September 29, 2026 (180 days) for smaller companies
The tariffs are linked to which country the medicine is from:
15% tariffs for drugs from EU, Japan, Korea, Switzerland
10% tariffs for drugs from UK
There are companies that are exempt from these tariffs or imposed at a reduced amount: 0% tariffs – for companies that have entered into MFN pricing deals AND onshoring agreements 20% tariffs – for companies only entering onshoring agreements with the Department of Commerce
Generic pharmaceutical products, biosimilars, and associated ingredients are not subject to tariffs at this time. Orphan drugs, drugs for animal health, and certain other specialty pharmaceutical products will also be exempt, if they are from trade deal countries or meet an urgent public health need.
The Fact Sheet published by President Trump offers for the Department of Commerce and HHS to provide pathways for companies to enter into onshoring and MFN pricing deals with the U.S. Government. It is likely we will see future agreements with additional companies before the July 31st effective date.
For more information, please contact Marc Lafoley at mlafoley@pangaea-consultants.com or Marla Weingarten at mweingarten@pangaea-consultants.com