Full Press Release Details
The Trump administration hasimposeda 100% tariff on imports of patented pharmaceutical products and ingredients. However, analysts predicted the action will have a limited effect on many companies.
One year after proposing its “Liberation Day” tariffs, the Trump administration has completed a Section 232 investigation into the pharma industry and imposed tariffs in response to the findings. Aiming to bolster national security and public health, the administration will impose a 100% tariff on imports from 17 large companies in 120 days. The tariffs will apply to smaller companies in 180 days.
Most large companies have already mitigated the risk by striking deals with the Trump administration. A 0% tariff rate will apply to companies with Most Favored Nation (MFN) and onshoring agreements with the administration through January 20, 2029. Companies that only have onshoring agreements face a 20% tariff rate.
But not all of those deals have resulted in exemptions. Despite being the first Big Pharma to appear at the White House announcing an agreement and specifically agreeing to MFN pricing,Pfizerison the listof businesses subject to the 120-day deadline but absent from the list of firms with company-specific tariff agreements.
Johnson & JohnsonandGSKhave all disclosed deals with the Trump administration but are nonetheless listed as companies facing near-term tariffs and missing from the list of drugmakers with White House agreements.
Regeneron, which has yet to strike a deal, is also listed as being required to pay the levies in 120 days, although BMO Capital Markets analysts said in a note to investors that the company has indicated it expects to be exempt from tariffs. The analysts expect Regeneron to disclose a deal soon.
Indeed, companies without deals will have pathways to reaching agreements, the administration said. Jefferies analysts said in a note to investors that existing deals set precedents for others to follow.
Companies may incur tariffs significantly below 100% even if they fail to reach agreements. Under the terms of trade deals, imports from the European Union, Japan, Korea, Switzerland and Liechtenstein will incur a 15% tariff. The United Kingdom hassecureda 0% tariff on exports to the U.S. as part of a deal that lowers a reimbursement threshold.
A 0% tariff rate applies to products including orphan drugs, cell and gene therapies and antibody-drug conjugates. BMO analysts said the carve-outs likely lower the broader impact to the industry if tariffs are implemented against small, more specialized biotech companies.
Yet BIO, the trade group that represents smaller biotechs, warned the tariffs could cause harm. Tariffs “will raise costs, impede domestic manufacturing and delay the development of new treatments,” BIO CEO John Crowley said in a statement. Crowley added that tariffs, the uncertain policy environment and MFN schemes “work directly against” the goal of increasing biotech’s investments in the U.S.
Generic and biosimilar medicines are completely exempt from the tariffs, although the administration pledged to review the decision in one year. The Association for Accessible Medicine, a trade group for off-patent drugmakers,applaudedthe exemption of generic and biosimilar drugs and ingredients from the tariffs.