What you need to know  
On Monday, the U.S. Department of Commerce (Commerce Department) posted a notice initiating public comments for a Section 232 investigation — launched April 1 — into drug imports, paving the way for potential tariffs on pharmaceuticals and pharmaceutical products.

In recent weeks, the Trump Administration has signaled imposing tariffs on drugs, citing the action could stem from a Section 232 investigation. Pharmaceuticals were exempt from both baseline and reciprocal tariffs, which are currently on a 90-day pause, but have since become a target alongside other sector-specific proposals. 

Prime Therapeutics (Prime) has activated a cross-functional team to monitor the investigation, assess impacts and prepare for possible disruptions or drug shortages.

Overview 
Today, the Commerce Department formally published notice of the investigation into pharmaceutical tariffs in the Federal Register — the initial step in launching the process. Section 232 of the Trade Expansion Act of 1962 empowers the president to adjust imports, including through tariffs, if it's determined that those imports threaten national security, with the broader aim of assessing the feasibility of increasing domestic production.

The investigation will focus on pharmaceuticals, Active Pharmaceutical Ingredient (API) medicines and pharmaceutical derivatives. As outlined in our April 4 communication, China and India are both key suppliers of biopharma manufacturing and raw API materials. Potential impacts of levied tariffs include:

• Increased cost of some API medicines and finished pharmaceuticals. In turn, this could shrink inventories of some API, leading to shortages.
• Generic drug manufacturers may face increased cost pressures in addition to price hikes for over-the-counter medicines like ibuprofen and acetaminophen.
• Longer-term impacts from tariffs are uncertain, though it's possible that drug prices, premiums and copays could rise over time.​​​​

It's possible exceptions will be made for certain essential medicines or research-related imports. Any tariff implementations after the investigation could be delayed due to complexities of the pharmaceutical supply chain and the need for a phased approach in implementing tariffs.

What Prime is doing
Now that a Section 232 investigation into pharmaceuticals is moving forward, we are closely monitoring developments and will continue to share updates as more information becomes available.

To support this effort, we've established a cross-functional task force to proactively assess risks, evaluate impacts and prepare for a range of potential outcomes — including readiness scenarios focused on monitoring supply chain and anticipating possible drug shortages.

Prime will continue to drive affordability by fostering competition among manufacturers to secure better pricing and expand access to medicines for patients and payers.

Additional resources
Explore the resources below to learn more about the investigation and upcoming tariffs. Bookmark the pharmaceutical tariff Client News page for up-to-date information and to stay informed on key developments and timelines.

• US moves ahead on tariffs with investigations into computer chips and pharmaceuticals
• US steps up probes into pharmaceutical, chip imports, setting stafe for tariffs
• Trump pharma tariffs raises specter of shortages, price hikes

Questions? 
Please reach out to your account team representative or email client communications.