Trump Sets 100% Tariffs on Branded Drug Imports for Oct. 1, Unless Firms Are Building in the US

President Donald Trump announced that starting October 1, the US will impose 100% tariffs on branded or patented drug imports. This measure, revealed with new duties on furniture, cabinets and heavy trucks, marks the first time finished medicines will face such high levies.

The move exempts companies that are building facilities in the US. The White House clarified this definition as projects that have already started or are under construction.

Trump believes the tariffs will encourage drugmakers to shift production to the US, strengthen supply chains and help lower costs.

The White House justified the move under Section 232 of the Trade Expansion Act, which permits tariffs when imports are deemed a national security concern.

Analysts, however, caution that the immediate effect may be limited, since many global pharma firms already operate domestic sites and have recently pledged large new investments.

In April, Johnson & Johnson estimated a $400 million tariff-related expense across its medical device portfolio, illustrating how existing duties are already influencing company financials.

Trump has also suggested escalating drug tariffs to as high as 250% over time.

Drugmakers including Eli Lilly, AstraZeneca and Johnson & Johnson have announced significant US expansions in recent months.

Exemptions and Stockpiling

Generic medicines are exempt. Experts say this distinction is crucial for preventing deeper shortages. India, which provides nearly half of the generics used in the US, is largely unaffected for now. In Europe, pharmaceutical exporters are protected from the full 100% tariff: a July US-EU trade agreement capped duties at 15%, a ceiling confirmed in September updates. By contrast, Asian exporters are exposed to the full 100% rate.

Before the October deadline, importers have stockpiled medicines, which may lessen the tariff’s short-term impact. But economists warn that these reserves will eventually run out, potentially leading to higher costs for patients and insurers.

Industry Impact and Divide

Since Trump first signaled plans for drug tariffs, pharmaceutical companies have announced more than $250 billion in US manufacturing commitments.

AstraZeneca pledged $50 billion, Johnson & Johnson committed $55 billion and Eli Lilly set aside $27 billion for four new plants. While some projects were already in progress, industry analysts say companies are showcasing them as proof of their support for White House policy.

However, the difference between branded and generic drugs is significant. Branded medicines make up less than 10% of prescriptions but account for over 80% of pharmaceutical spending.

With higher profit margins and patent protection, these firms can better handle tariff costs and are more likely to bring production back to the US, even for active pharmaceutical ingredients (APIs). Some may even opt to produce APIs domestically, send them abroad for processing and bring them back without tariffs.

Generics, however, make up 90% of prescriptions but less than 20% of spending. Over 92% of generic API facilities serving the US are located overseas, mainly in India, China and Italy. Thin margins and fierce price competition leave little room for relocating production. This could increase the risk of supply disruptions, especially since more than 80% of current US drug shortages involve generics.

Potential Global Supply Chain Pressures

The globalized nature of drug production means tariffs may create uneven effects. Several best-selling therapies, including diabetes and oncology treatments like Ozempic, Mounjaro and Opdivo, still rely heavily on overseas production, leaving them exposed to the new tariffs unless US plants become operational quickly. If new US facilities do not ramp up soon, patients could face higher costs or reduced access.

Policy experts note that tariffs were previously avoided on medicines because of concerns about affordability and availability. US regulators tracked 323 active drug shortages in early 2024, with about 90 still unresolved in early 2025. This is a fragile situation that experts warn could be further strained by new trade barriers.

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