The Trump administration on Thursday imposed new tariffs on brand-name drugs from drug companies that do not have a U.S. drug price reduction deal with the president. This is a long-awaited move, but it will likely only affect a small number of pharmaceutical companies.
“We need to make sure that our medical supplies are protected, safe and domestic,” a senior government official, who declined to be named, told reporters Thursday. “That’s what we’re doing.”
The Trump administration also on Thursday changed the way tariffs are calculated on imported raw materials made from steel, aluminum and copper, and on imported products containing those metals.
Patented medicines and their active ingredients face 100% customs duty under the drug plan, but there are avenues for drug companies to reduce or avoid the tax, officials said.
The administration plans to impose a 20% tariff on companies that plan to produce domestically, raising it to 100% in four years. Pharmaceutical companies that have fully implemented drug pricing agreements or are currently negotiating with the Department of Health and Human Services and are building domestic manufacturing will be exempt from tariffs. According to the person, new domestic factories must be completed by January 2029 to qualify.
The official said Big Pharma has 120 days before 100% tariffs go into effect, but the administration expects more companies to announce reshoring plans by then. Smaller pharmaceutical companies that rely on contract manufacturers have 180 days to reach this rate.
Meanwhile, some countries with larger trade deals with the United States will face different drug taxes, with the European Union, Japan, South Korea and Switzerland at a rate of 15%. The official said Britain would face a 10% tariff, in part because the British government had increased the price of medicines.
“Those countries have larger trade deals with the United States, so production can stay in those countries,” the official said.
Genetic products, biosimilars and related ingredients are not currently subject to tariffs, but will be reevaluated within a year, the White House said in a fact sheet.
The fact sheet states that certain specialty medicines, including those for animal health and rare conditions, will be exempt from tax if they are imported from countries with which the country has trade agreements or if they “meet an urgent public health need.”
The plan represents another shift in President Trump’s aggressive trade strategy, more than a month after the Supreme Court struck down the president’s 2025 global tax that excluded the pharmaceutical industry. The sectoral tariffs were introduced following a Department of Commerce investigation that determined that certain pharmaceutical imports pose a national security risk to the United States.
U.S. President Donald Trump (center), along with Health and Human Services Secretary Robert F. Kennedy Jr. (R) and National Institutes of Health (NIH) Director Jayanta Bhattacharya (left) speak at a press conference about prescription drug prices in the Roosevelt Room of the White House on May 12, 2025, in Washington, DC.
Jim Watson | AFP | Getty Images
Since November, more than a dozen major pharmaceutical companies, including: Eli Lilly, pfizer and novo nordisksigned a deal with President Trump to lower the prices of new and existing drugs. These agreements are part of the president’s “most-favored-nation” policy, which ties U.S. drug prices to lower drug prices overseas and exempts companies from tariffs for three years.
Trump administration officials said 13 companies have already signed drug pricing agreements and negotiations are progressing with four other drug companies. The official added that during President Trump’s term, manufacturing reshoring efforts in this sector have already reached $400 billion.
Ahead of the landmark drug price deal, President Trump repeatedly threatened to impose tariffs on drug imports. These threats, and efforts to curry favor with the president, stimulated a new wave of pharmaceutical industry investment in U.S. manufacturing. These efforts were undertaken at a time when domestic pharmaceutical manufacturing was significantly curtailed.
Individual metals-related tariffs include 50% tariffs on raw materials made from steel, aluminum and copper, such as aluminum sheets and steel coils, but on the full amount paid by U.S. importers.
A senior administration official said in a call with reporters Thursday that the adjustments are being made to prevent foreign sellers from undervaluing domestic products in order to get lower tariffs.
Imported finished products containing 15% or more of these metals will be subject to a 25% tariff on the total value of the item. The previous tariff was 50% only on the value of the metals contained in the product.
Finished products containing less than 15% of these metals are not subject to customs duty.
Government officials said the change in tariffs on metals should not affect the cost of goods, but non-government estimates suggest a small increase in effective tariff rates.
The Committee for a Responsible Federal Budget estimates that this change will increase federal revenue by an additional $70 billion over the next 10 years.
—CNBC’s Megan Cassella contributed to this article.
