The United States is imposing high tariffs on imported medicines.
The United States is introducing new tariffs on patented medicines and their components, reaching up to 100% for major companies. Generics and biosimilars are currently exempt from these tariffs, and certain countries and agreements are granted special benefits. These measures are aimed at encouraging investment in the American pharmaceutical industry.
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Introduction of New Tariffs on Pharmaceuticals
On Thursday, the President of the United States announced the introduction of tariffs on patented pharmaceutical products and their ingredients under Section 232 of the Trade Expansion Act of 1962. The new measures include a 100% tariff on patented medicines and their components. For large companies, these tariffs will take effect in 120 days, while smaller companies will have 180 days to comply.
Tariffs by Country and Agreements
Pharmaceutical products imported from the European Union, Japan, Korea, Switzerland, and Liechtenstein will be subject to a 15% tariff. Products from the United Kingdom will face a lower rate due to a recently signed pharmaceutical agreement between the two countries.
Companies that have entered into most-favored pricing agreements with the Department of Health and Human Services, as well as agreements to relocate production to the United States with the Department of Commerce, will be exempt from tariffs until January 20, 2029. Companies that have only signed agreements to move production will face a 20% tariff.
Exemptions and Review
Currently, generic drugs, biosimilars, and their related ingredients are not subject to tariffs. A review of the conditions for these categories is scheduled in one year. Orphan drugs, veterinary medicines, and certain specialized pharmaceutical products are exempt from tariffs if they are imported from countries with trade agreements or if they meet urgent public health needs.
Reasons for Tariffs and Investment
The introduction of tariffs followed an investigation by the U.S. Department of Commerce under Section 232 of the Trade Expansion Act of 1962. The investigation found that imports of patented pharmaceuticals and related ingredients into the U.S. have reached levels that could pose a threat to national security.
The new tariffs are expected to result in investment commitments of around $400 billion from American and foreign pharmaceutical companies, which will be invested in the U.S. economy during the current presidential term.