What you need to know

Yesterday, the Trump administration shared via social media a new trade policy that will directly affect pharmaceutical imports. According to the post, a 100% tariff will apply to branded (patented) finished pharmaceutical products imported into the U.S. beginning October 1, 2025. This is a global tariff and is not limited to specific countries. Importantly:  

• Generic drugs are excluded. 
• Active pharmaceutical ingredients (APIs), intermediates, and raw materials used in drug production are also excluded at this time. 
• Companies actively building U.S.-based manufacturing facilities (e.g.: those that have broken ground or are under construction) may be exempt from the tariff. 

Note: No official executive order or formal guidance has been issued yet. Additional details may emerge as the administration clarifies its policy. 

Manufacturers exempt from this policy 

As mentioned above, pharmaceutical manufacturers may be exempt if they have U.S.-based manufacturing facilities actively under construction or recently announced. The exemption is designed to encourage domestic production.

Note: Many manufacturers already have U.S. operations or investment plans, which may limit the number of products directly impacted. Further guidance is expected on what qualifies as “under construction” and how exemptions will be applied in practice. 

Navigating uncertainties in the pharmaceutical tariff policy 

As the details of the new pharmaceutical tariffs continue to unfold, the evolving nature of this policy means that some implications may only become evident over time. Ongoing monitoring and strategic adjustments will be essential to minimize potential disruptions. Key considerations include:  

• Cost pressures: Branded drugs manufactured abroad may face significant price increases if tariffs are applied. However, exemptions—such as those for companies investing in U.S.-based manufacturing—could offset the impact for some products.
• Supply chain complexity: The policy introduces uncertainty around the availability and sourcing of branded drugs, particularly those primarily produced outside the U.S. From what we can tell, many manufacturers have already begun stockpiling branded pharmaceutical products in anticipation of potential disruptions. As a result, the short-term impact may be limited, but longer-term effects could emerge depending on how the policy is implemented and enforced. 
• International response: Trade partners in the EU, Japan, and the UK have raised concerns about the proposed tariffs, prompting potential disputes or legal challenges. Based on earlier announcements, tariffs from the EU and Japan may be capped at 15%, which suggests that some countries may be pursuing direct negotiations with the U.S. to secure reduced rates or exemptions, rather than being subject to the full 100% tariff.
• Future scope: While generic drugs and active pharmaceutical ingredients (APIs) are excluded from the current policy, the Trump administration has not ruled out expanding tariffs to additional categories if policy goals are not met. 

Next steps 

While no official executive order or formal guidance has been issued yet, we expect additional details to emerge in the coming days, potentially clarifying exemptions, enforcement mechanisms, and country-specific terms. We are monitoring the situation closely and will share updates as soon as they become available. No action is required by clients at this time.

Questions

Reach out to your Prime account team representative.