New tax will hit branded drugs and active ingredients while exempting generics for at least one year
Donald Trump is threatening 100% tariffs on pharmaceutical companies that have not struck deals to lower US drug prices.
The new tariff will only apply to branded drugs and their active ingredients. Generic drugs, which make up more than 90% of medicines sold in the US, will be exempted from tariffs for at least one year. Orphan, veterinary and other specialty drugs are exempt if they are from trade deal countries or meet urgent public health needs.
Drugmakers who enter pricing agreements with the White House and onshore drug production will be exempted from the tariffs. Companies that plan to increase their domestic manufacturing will see a 20% tariff that will increase to 100% in four years.
The US has already agreed to exemptions for 17 drugmakers, four of which are still being negotiated. Big drugmakers that have signed deals, which exempt them from tariffs for three years, include Pfizer and Eli Lilly, among others.
