US Imposes 100% Tariffs on Imported Branded Drugs to Boost Domestic Production

The U.S. President Donald Trump announced that from October 1 imported branded or patented pharmaceutical products will be subject to a 100% tariff if their manufacturers do not build factories in the United States. The move aims to expand domestic production and strengthen the security of supply chains for life-saving medicines.

Trump had previously promised to apply tariffs on drug imports and is now viewing this as a tool to pressure companies to relocate production to the United States and increase national autonomy in the pharmaceuticals sector.

Experts doubt that such tariffs will realistically lower prices for consumers or significantly affect the market, as global supply chains and investments in pharmaceuticals are closely tied to many countries around the world.

Nevertheless, companies announced plans to invest substantial sums in American production. For instance, this week Eli Lilly announced a $6.5 billion plant in Houston and is considering another site near Richmond, Virginia, for about $5 billion.

“IS BUILDING” will be defined as “laying the foundation” and/or “in the process of construction,” – Trump wrote on Truth Social. “Therefore, there will be no tariffs on these pharmaceutical drugs if construction has begun.”

The White House on Friday explained to CNN that companies that are in the process of launching the production of a pharmaceutical product in the United States will not be subject to tariffs on that specific product until the factory is completed, taking into account previously agreed projects.

Analysts differentiate the impact of tariffs on different market players: some believe the advantages will go to those who already have construction plans, others that smaller companies could be harmed due to greater uncertainty in future plans.

“The actual statement by the president is direct, but its impact may be somewhere between uncertain and modest.”

Regarding the EU, the European Commission confirmed maintaining a 15% tariff ceiling on EU goods, calling it a kind of insurance against rising tariffs for European operators.

“This explicit, comprehensive 15% tariff ceiling for EU exports is an insurance policy that European economic operators will not face higher tariffs.”

The White House also confirmed that the commitment to adhere to the 15% tariff cap under agreements with the EU and Japan will be honored. At the same time, Trump did not mention the possibility of imposing tariffs on imports of generic drugs, which could worsen drug availability.

As for India, the country is currently partly exempt from tariffs: its pharmaceutical export is oriented toward generics, but India supplies nearly 47% of the medicines the United States needs. According to Namit Joshi, head of the Pharmaceutical Export Promotion Council of India, most Indian companies already have manufacturing or repackaging capacities in the United States and are considering additional steps.

“India, for example, is currently exempt because its drug exports focus on generics, though it supplies nearly 47% of the medicines needed in the United States.”

Analysts emphasize that even in the absence of tariffs, India continues to play a significant role in the American market thanks to generics, but future changes in the structure of the global pharmaceutical industry keep many uncertainties.

The U.S. government also expressed readiness to publish further findings of a national-security investigation into drug imports, which could form the basis for new tariff steps. Trump himself did not rule out raising tariffs to 250% and adjusting them over time.

The day’s summary indicates the scale of the administration’s trade policy: along with tariffs on medicines, tariffs were also introduced on kitchen cabinets, bathtubs, upholstered furniture, and imports of cargo equipment, underscoring the policy’s intent to influence various sectors of the economy.

What this means for consumers and the market

The appearance of a 100% tariff on imported medicines could lead to higher prices in the short term and affect the availability of certain drugs. At the same time, the government emphasizes a phased approach to stimulate domestic production and reduce dependence on external suppliers in critical sectors. Experts advise closely watching the progress of companies’ plans to build factories in the U.S. and decisions on permits to assess the real impact on prices and drug availability in the future.