The US President has said he will use tariffs to reduce expensive pharmaceutical drugs, but the impact remains uncertain.
Published on 2 April 2026
United States President Donald Trump has signed an executive order that could impose long-threatened tariffs of up to 100 percent on certain patented drugs if pharmaceutical companies do not reach agreements with his administration in the coming months.
Under Thursday’s executive order, companies that have signed “most favored nation” pricing agreements and are actively building facilities in the U.S. will have zero-percent tariffs.
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For those that do not have a pricing agreement but are building such projects in the US, a 20 percent tariff will apply but will increase to 100 percent over four years.
A senior administration official told reporters on a press call that companies still have several months to negotiate before 100 percent of the tariffs go into effect. Larger companies will have 120 days, and everyone else will be offered 180 days.
The official, who spoke on condition of anonymity to preview the executive order before it is issued, did not identify any companies or drugs that were at risk of being affected by the increased tariffs.
But the source said the administration has already reached 17 pricing deals with major drugmakers, 13 of which have been signed.
In Thursday’s executive order, Trump wrote that he deemed the tariffs necessary “to address the harm to national security resulting from the importation of pharmaceuticals and pharmaceutical ingredients.”
The order came on the first anniversary of Trump’s so-called Emancipation Day, when the president unveiled sweeping new import taxes on nearly every country in the world, sending the stock market into turmoil. Those “Liberation Day” tariffs were among the duties the Supreme Court overturned in February.
Critics, pharmaceutical leaders and medical groups warned about the consequences of the new tariffs.
“A tax on cutting-edge drugs would raise costs and could lead to billions in lost American investment,” said Stephen J. Ubball, CEO of pharmaceutical company trade group PhRMA.
He pointed to the US’s already large footprint in biopharmaceutical manufacturing and said the drugs obtained from other countries “largely come from trusted US allies”.
Trump has launched a barrage of new import taxes on US trading partners since the start of his second term and has repeatedly promised to impose excessive taxes on foreign-made drugs.
But the administration has also used the threat of new levies to strike deals with major companies such as Pfizer, Eli Lilly and Bristol Myers Squibb last year, with promises of lower prices for new drugs.
In addition to company-specific rates, a handful of countries have reached trade frameworks with the US to further limit tariffs on drugs shipped to the US.
The European Union, Japan, Korea and Switzerland will impose 15 percent U.S. tariffs on patented pharmaceuticals, equal to previously agreed rates for most goods.
The United Kingdom, meanwhile, will get 10 percent, which Thursday’s order said will “then be reduced to zero” under future trade agreements.
The UK previously said it had secured a zero-percent tariff rate for all British medicines exported to the US for at least three years.
