US president has said that he will use tariffs to bring down costly pharmaceutical drugs, but the impact remains uncertain.
Published On 2 Apr 2026
United States President Donald Trump has signed an executive order that could slap long-threatened tariffs of up to 100 percent on some patented drugs if pharmaceutical companies don’t reach deals with his administration in the coming months.
Under Thursday’s executive order, companies that have signed a “most favoured nation” pricing deal and are actively building facilities in the US will have a zero-percent tariff.
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For those that don’t have a pricing deal but are building such projects in the US, a 20 percent tariff will apply, but it will increase to 100 percent in four years.
A senior administration official told reporters on a press call that companies still have months to negotiate before the 100 percent tariffs kick in. Bigger companies will have 120 days, and 180 days are offered for everyone else.
The official, speaking on condition of anonymity to preview the executive order before it was issued, did not identify any companies or drugs that were in jeopardy of getting hit with the increased tariffs.
But the source noted the administration had already reached 17 pricing deals with major drugmakers, 13 of which have signed.
In Thursday’s executive order, Trump wrote that he deemed the tariffs necessary “to address the threatened impairment of the national security posed by imports of pharmaceuticals and pharmaceutical ingredients”.
The order arrived on the first anniversary of Trump’s so-called Liberation Day, when the president unveiled sweeping new import taxes on nearly every country in the world, sending the stock market reeling. Those “Liberation Day” tariffs were among the duties the Supreme Court overturned in February.
Critics, pharmaceutical leaders and medical groups warned of the consequences the new tariffs could bring.
Stephen J Ubl, the CEO of the pharmaceutical company trade group PhRMA, said taxes “on cutting-edge medicines will increase costs and could jeopardize billions in US investments”.
He pointed to America’s already large footprint in biopharmaceutical manufacturing and noted medicines sourced from other countries “overwhelmingly come from reliable US allies”.
Trump has launched a barrage of new import taxes on US trading partners since the start of his second term and repeatedly pledged sky-high levies on foreign-made drugs.
But the administration has also used the threat of new levies to strike deals with major companies — like Pfizer, Eli Lilly and Bristol Myers Squibb — over the last year, with promises of lower prices for new drugs.
Beyond company-specific rates, a handful of countries have reached trade frameworks with the US to further cap tariffs on drugs sent to the US.
The European Union, Japan, Korea and Switzerland will see a 15 percent US tariff on patented pharmaceuticals, matching previously agreed rates for most goods.
Meanwhile, the United Kingdom will get 10 percent, which Thursday’s order noted would “then reduce to zero” under future trade agreements.
The UK previously said it secured a zero-percent tariff rate for all British medicines exported to the US for at least three years.