The United States has announced a major policy shift by imposing a 100% tariff on patented medicines entering the country. However, pharmaceutical companies can avoid these charges by negotiating agreements with the government.
President Donald Trump introduced the tariffs to strengthen domestic drug manufacturing and reduce reliance on foreign supply chains. Officials say the move aims to address national security concerns linked to medicine production.
The policy mainly targets patented drugs and does not apply to generic medicines, which make up the majority of prescriptions in the US. This limits the immediate impact on consumers.
Companies that commit to building manufacturing facilities in the US before 2029 will qualify for a reduced tariff rate of 20%. Firms can eliminate tariffs entirely if they agree to pricing deals with government programs such as Medicaid.
Several large pharmaceutical companies have already secured agreements to avoid the new tariffs. Experts believe the policy is designed to pressure remaining firms into negotiations.
The US will also honor existing agreements with partners including the United Kingdom, Japan, and South Korea, ensuring lower or zero tariffs under prior deals.
While large firms may adapt quickly, smaller companies could face higher costs, which may eventually affect drug prices and market competition.
