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President Donald Trump signed an executive order on Thursday that could impose tariffs of up to 100% on some patented drugs and their active ingredients, according to multiple reports. The order, described by administration officials as a measure to address national security concerns, targets pharmaceutical companies that do not reach pricing agreements with the White House within a specified negotiation window.

The tariffs, which have been threatened for months, apply only to branded drugs and their ingredients, with generic drugs exempt for at least one year, per one report. Companies that have signed a “most favoured nation” pricing deal and are actively building facilities in the US to onshore production of patented pharmaceuticals and their ingredients will face a 0% tariff, as reported by multiple sources.

For companies that do not have a pricing deal but are building such projects in the US, a 20% tariff will apply, increasing to 100% in four years. A senior administration official told reporters on a press call that companies have months to negotiate before the 100% rates take effect — 120 days for bigger companies and 180 days for everyone else, according to the reports.

Coverage Comparison

The executive order was covered by multiple outlets, including France 24, The Guardian, and The Hindu, each providing similar core details. Reports from France 24 and The Hindu focused on the national security rationale and the exemption structure, while The Guardian highlighted the impact on branded drugs and the exemptions, including the one-year reprieve for generics.

The Guardian additionally reported that drugmakers who enter pricing agreements with the White House and onshore production will be exempted, and that companies planning to increase domestic manufacturing will face a 20% tariff that rises to 100% in four years. The Guardian also mentioned that the US has already agreed to exemptions for 17 drugmakers, four of which are still being negotiated.

While all sources agree on the central fact of the executive order and the tariff rates, some details, such as the specific exemption categories and the number of drugmakers with deals, were only carried by a single outlet and have not been independently verified by the others.

The order was signed on the first anniversary of Trump’s so-called “Liberation Day,” when sweeping new import taxes were unveiled on nearly every country, sending stock markets reeling. Those “Liberation Day” tariffs were among the duties overturned by the Supreme Court in February, as noted by multiple reports.

Key Claims

  • Tariffs of up to 100% on patented drugs: President Trump signed an executive order on Thursday that could impose tariffs of up to 100% on some patented drugs and their ingredients, according to reports from France 24, The Hindu, and The Guardian. The tariffs apply to companies that do not reach deals with the administration in the coming months.
  • Exemption for companies with pricing deals and onshore production: Companies that have signed a “most favoured nation” pricing deal and are actively building facilities in the US to onshore production will face a 0% tariff, as reported by multiple sources.
  • Regional tariff rates: The EU, Japan, Korea, and Switzerland will see a 15% US tariff on patented pharmaceuticals, and the UK will get 10%, which will then reduce to zero under future trade agreements, as reported by multiple sources.
  • Generic drugs exempt for one year: Generic drugs will be exempted from tariffs for at least one year, according to a single report from The Guardian. This detail has not been confirmed by other sources.
  • Exemptions for orphan, veterinary, and specialty drugs: Orphan, veterinary, and other specialty drugs are exempt if they are from trade deal countries or meet urgent public health needs, as stated in a single report from The Guardian.
  • Exemptions for drugmakers with pricing agreements: Drugmakers who enter pricing agreements with the White House and onshore production will be exempted from tariffs, as reported by The Guardian.
  • Exemptions for 17 drugmakers: The US has already agreed to exemptions for 17 drugmakers, four of which are still being negotiated, according to a single report from The Guardian. This claim has not been corroborated by other sources.
  • 20% tariff for companies planning domestic manufacturing: Companies that plan to increase their domestic manufacturing will see a 20% tariff that will increase to 100% in four years, as reported by The Guardian.
  • Negotiation windows: Large companies have 120 days before the rate goes into effect and can negotiate deals with the White House to skirt the tariff or reduce the levy, while smaller companies will have 180 days to negotiate, as reported by multiple sources.

Perspectives

The executive order has drawn criticism from pharmaceutical industry groups. Stephen J. Ubl, CEO of the trade group PhRMA, said tariffs “on cutting-edge medicines will increase costs and could jeopardize billions in U.S. investments,” as quoted by one source.

The Midsized Biotech Alliance of America (MBAA) warned that the order risks creating an “unfair two-tiered system of exemptions” benefiting only big companies that have already made most-favored-nation deals with Trump, according to The Guardian. Alanna Temme, MBAA’s president, said mid-sized drugmakers “lack diversified portfolios to absorb these sudden cost increases.”

The administration, however, frames the tariffs as necessary to address national security concerns posed by imports of pharmaceuticals and pharmaceutical ingredients, as stated in the executive order. Trump has been pressuring drugmakers through his most-favored-nation drug pricing policy to lower prices to what people pay in other high-income countries, noting that US patients pay far more for prescription medicines than in other developed nations.

The announcement also comes as the White House faces pressure from consumers to lower drug prices amid other tariff-related price increases, as reported by The Guardian.