President Donald Trump ordered a 100% tariff on brand-name pharmaceuticals produced overseas as his administration escalates efforts to push drug companies to manufacture in the United States.
Trump threatened to impose the tariff last year but has since worked to negotiate deals with drug companies to lower their prices and bring drug production to the U.S.
Multiple companies have agreed to such deals. Drug companies that commit to moving production to the United States will face a 20% tariff while they are transitioning and no tariff if they also agree to lower prices to so-called “most favored nation” levels paid by other countries, according to the order. The full tariff will be levied if drug production isn’t in the U.S. in four years.
The European Union, Japan, South Korea, Switzerland and the United Kingdom are exempt from the tariff due to existing trade deals with the United States.
A senior White House official said the tariff will help ensure the United States is not beholden to other countries for lifesaving drugs. The tariff takes effect on July 31 for some companies and September 29 for others, depending on their size.
