New U.S. Tariffs on Branded and Patented Drugs Announced
While the levies seem steep the impact on industry may be less severe than expected as many companies have a presence or are planning works for manufacturing facilities within the U.S., making them exempt from the tariffs.
U.S. President Donald Trump has announced that, from October 1, 2025, there will be 100% tariffs placed onto branded or patented pharmaceutical products imported into the U.S. for companies that do not have a manufacturing presence in the country. However, the President stated that if the drugmakers are already building manufacturing facilities within the U.S., then they will be exempt from the duty (1–4).
Speaking to the BBC, Neil Shearing, Chief Economist at Capital Economics, emphasized that the announcement was not as severe as it may seem initially. “Many of the world's largest pharmaceutical companies either already have some production in the US or have announced plans to build production in the near future,” he said (1).
In fact, according to the White House website, there are numerous pharmaceutical companies and drug makers (at least 17 at the time of writing) that have/are making U.S.-based investments (5). Under the exemption as specified by the President, these companies would not be subjected to the 100% tariffs.
However, questions are being raised about how these new tariffs will be impacted by other previously agreed rates of if they would be compounded. For example, would the trade agreement, recently reached between the U.S. and European Union — whereby tariffs for pharmaceuticals would not exceed 15% (6) — remain in place, or would companies who have not invested in the U.S. see tariffs compounded?
“This clear all-inclusive 15% tariff ceiling for EU exports represents an insurance policy that no higher tariffs will emerge for European economic operators. The EU is the only trade partner to achieve this outcome with the US,” said Olof Gill, European Commission Deputy Chief Spokesperson to Euractiv (7). “The EU and U.S. continue engaging towards implementing the Joint Statement commitments, while exploring further areas for tariff exemptions as well as wider cooperation.”
References
Chia, O.; Edwards, C. Trump Announces New Tariffs on Drugs, Trucks, and Kitchen Cabinets. BBC News, Sept. 26, 2025.
Guardian Staff and Agencies. Trump Says US Will Impose New Tariffs on Heavy Trucks, Drugs, and Kitchen Cabinets. The Guardian, Sept. 26, 2025.
Luhby, T. A 100% Tariff on Some Imported Drugs is Coming October 1, Trump Says. CNN, Sept 26, 2025.
Shepardson, D. Trump Slaps New US Tariffs on Drugs, Trucks, and Furniture. Reuters, Sept. 26, 2025.
The White House. Trump Effect: A Running List of New U.S. Investment in President Trump’s Second Term. Article, Aug. 15, 2025 (last updated Sept. 2, 2025).
European Commission. Joint Statement on a United States-European Union Framework on an Agreement on Reciprocal, Fair, and Balanced Trade. News Release, Aug. 21, 2025.
Maguire, B. Ireland Blindsided by Trump’s Latest Pharma Firestorm. Euractiv, Sept. 26, 2025.