President Trump announced new pharmaceutical tariffs on Thursday, threatening a 100 percent tariff on companies who are not building pharmaceutical manufacturing plants in the U.S. beginning on Oct. 1. But who does that affect?
On his platform Truth Social, Trump said the rule would only affect a “branded or patented Pharmaceutical Product,” effectively leaving generic medicines untouched. Generic drugs account for the vast majority of prescriptions in the U.S.
Following Trump’s announcement, the administration clarified that the tariff would not supersede the 15 percent tariff trade deal between the U.S. and the European Union reached earlier this year.
“The EU accounts for roughly 70 percent of the U.S.’s roughly $200 billion in annual pharmaceutical imports. Asia accounts for 20 percent of imports, but that includes a significant amount of generics, which is excluded from tariffs,” Arthur Wong, health care managing director at S&P Global Ratings, told The Hill.
It remains unclear whether this rule applies to drugmakers who already have a manufacturing footprint in the U.S., as well as whether companies only need to manufacture one of their drugs on U.S. soil to gain the exemption or if it will be applied case-by-case.
In a rush to get ahead of the situation, multiple companies issued statements touting U.S. investments. AstraZeneca, GSK and Novartis have already pledged billions of dollars in new facilities or research and development in the U.S. this year.
Another federal drug price control policy that exempts generics, the Inflation Reduction Act (IRA), could be impacted by the enforcement of these new tariffs.
The IRA’s Medicare Drug Price Negotiation Program does not apply to medical products that have generics or biosimilars on the market, meaning branded products are the only ones affected. The discounted prices for the first 10 drugs chosen for Medicare negotiations are scheduled to go into effect beginning on Jan. 1.
These tariffs are ostensibly to support Trump’s goal of moving manufacturing back to the U.S. and supply chain experts say this requires a measured approach.
“Our position has always been that tariffs, when implemented in a targeted and thoughtful manner via a slow and steady glide path approach, can spur American ingenuity and help drive more resiliency in the supply chain, but when you implement them too fast and too furious, you do risk creating supply chain ripples, and that is the concern currently,” said Soumi Saha, senior vice president of government affairs at the health care improvement company Premier Inc.
Saha noted that domestic doesn’t always mean secure, noting the IV fluid shortage that hit the country last year after a North Carolina plant was shut down by Hurricane Helene.
Welcome to The Hill’s Health Care newsletter, we’re Nathaniel Weixel and Joseph Choi — every week we follow the latest moves on how Washington impacts your health.
Michigan Rep. Haley Stevens (D) on Friday introduced the “Stop RFK’s BS Act,” which would reverse the funding cuts that have been carried out under Health and Human Services Secretary Robert F. Kennedy Jr.’s rule. The bill, according to its text provided first to The Hill, would immediately reinstate grants and awards that have been terminated since the start of President Trump’s second term. Stevens’s …
The White House is touting efforts to expand eligibility for Health Savings Accounts (HSAs) for millions of Americans, as Democrats’ demands around health care access are front-and-center in the government funding fight. A report shared exclusively with The Hill from the White House Council of Economic Advisers outlines how the One Big Beautiful Bill Act, which President Trump signed into law in July, is expected to expand …
The Trump administration is considering adding autism to the list of injuries covered under the federal program aimed at compensating people who have been harmed by vaccines, according to a top adviser to Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. Changes made to the Vaccine Injury Compensation Program (VICP) have made it virtually impossible for children with regressive encephalopathy to be recognized …
The House Energy and Commerce Sucommittee on Health will hold a hearing Thursday to go over legislative proposals for supporting patients with rare diseases.
Around the Nation
Local and state headlines on health care:
20 years after Hurricane Katrina, Louisiana still struggles with evacuation plans that minimize health risks (KFF Health News)
Former Florida surgeon general: Vaccination mandate ban is ‘not based on science’ (Florida Phoenix)
Financial margins at Massachusetts hospitals tightening, or in the red (Boston Globe)
What We’re Reading
Health news we’ve flagged from other outlets:
Trump pushes unproven medical advice around Tylenol and vaccines (NBC)
Days before Trump deadline to lower prices, companies push a flurry of initiatives. Will it be enough? (Stat)
Meet Stefanie Spear, RFK Jr.’s “attached at the hip” HHS deputy (Vanity Fair)