President Donald Trump on Tuesday announced plans to impose tariffs as high as 200% on pharmaceutical imports into the United States, though he indicated these levies would not take effect immediately.
“We’re going to have tariffs at a very high rate, like 200%,” Trump said during a Cabinet meeting. However, he added, “We’ll give them about a year, year and a half” to “get their act together,” referring to drug manufacturers potentially bringing production back to the U.S.
Commerce Secretary Howard Lutnick told CNBC that details on the pharmaceutical tariffs will be finalized “at the end of the month” after studies on pharmaceuticals and semiconductors conclude. He said the president will then set his policies.
Uncertainty Over Tariff Enforcement
Trump’s history of fluctuating on tariff announcements leaves uncertainty about whether the 200% rate will be enacted. Following his comments, pharmaceutical stocks showed little change. David Risinger, an analyst at Leerink Partners, called the announcement positive for the industry, noting the tariffs will not be implemented immediately and it remains unclear if they will be imposed at all.
This marks Trump’s most significant mention of pharmaceutical tariffs since his administration launched a Section 232 investigation earlier this year. That investigation assesses the national security impact of imports.
Pharmaceutical companies have long opposed tariffs, warning they could raise costs, disrupt supply chains, reduce investment in the U.S., and risk patient access to medicines. They are already navigating challenges from drug pricing policies that could hurt their revenues and research budgets.
Several major drugmakers like Eli Lilly, Johnson & Johnson, and AbbVie have increased U.S. manufacturing investments in response to shrinking domestic production over past decades. Trump claims tariffs will encourage more of this reshoring.
PhRMA, the industry’s largest U.S. lobbying group, reiterated opposition to tariffs. Alex Schriver, PhRMA’s senior vice president of public affairs, said, “Every dollar spent on tariffs is a dollar that cannot be invested in American manufacturing or the development of future treatments and cures.” He added that medicines have historically been exempt from tariffs due to the risk of higher costs and shortages.
What The Author Thinks
While the goal of revitalizing domestic drug manufacturing is understandable, imposing extremely high tariffs risks unintended consequences. Tariffs on pharmaceuticals could increase costs for patients and healthcare providers and potentially disrupt supply chains that are already fragile. Instead of punitive measures, incentivizing investment and innovation in U.S. manufacturing through partnerships and support would better serve both industry and public health.
