Trump Plans New Tariffs on Pharmaceutical Industry
(Editor's note: Late on 4/2, the White House released a Fact Sheet about the tariffs.) President Trump is reportedly preparing to impose sweeping new tariffs on certain pharmaceutical imports, targeting companies that have not agreed to participate in his administration’s “Most Favored Nation” (MFN) drug pricing initiative, according to a draft executive order obtained by CNN.
The proposal would levy tariffs of up to 100% on imported patented drugs and their active pharmaceutical ingredients, marking a significant escalation in the administration’s effort to pressure drugmakers into lowering prices. The draft order outlines potential pathways for companies to reduce or avoid the tariffs, including negotiating direct-to-consumer pricing agreements with the federal government or shifting manufacturing operations to the U.S., CNN reports.
The order is not yet final and remains subject to revision, including possible exemptions for certain categories of medicines. However, the administration is expected to move quickly, with an announcement potentially coming as soon as today, a person familiar with the plans told CNN. The White House did not immediately respond to requests for comment, and Bloomberg first reported the initiative.
If implemented, the tariffs would represent an early step in Trump’s broader effort to reconstitute his aggressive trade agenda following a February ruling by the U.S. Supreme Court that struck down portions of his earlier tariff framework as unconstitutional. Trump has criticized the decision and signaled he will pursue alternative regulatory mechanisms to reinstate wide-ranging trade penalties.
The pharmaceutical tariffs are closely tied to the administration’s MFN pricing strategy, which seeks to lower U.S. drug costs by linking them to prices paid in other developed countries. While the administration has already reached agreements with more than a dozen drugmakers to sell certain products directly to consumers, the program currently applies to a limited set of medicines, many of which face competition from lower-cost generics.
Under the draft order, companies that participate in the MFN initiative would be exempt from the new tariffs, creating a strong financial incentive for broader industry participation, according to CNN. Additionally, drugmakers could qualify for a reduced tariff rate of 20% for up to four years if they commit to relocating production to the U.S., though that rate would revert to 100% beginning in 2030.