Trump upends drug import policy with 100 percent tariff threat
Pharma manufacturing facility construction placed at the heart of a policy announcement made on social media.
US president Donald Trump has significantly upped the ante in his bid to encourage pharmaceutical manufacturing investment in the country with a surprise announcement of a 100 percent tariff on internationally produced drugs.
Exact details of the policy, which is set to take effect next week, remain scant after it emerged in a post on President Trump’s Truth Social in the middle of the night.
Nevertheless, if it is applied as outlined on the social media platform, all imports of non-generic medicines made outside the US by companies that are not currently building pharma a manufacturing plant in the country will face a 100 percent tariff.
The pronouncement will leave the pharma industry scrambling to both decipher the fine detail hidden within President Trump’s short post and then to formulate a response.
His Truth Social post read: “Starting October 1st, 2025, we will be imposing a 100 per cent Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America. ‘IS BUILDING’ will be defined as ‘breaking ground’ and/or ‘under construction.’”
It’s the latest, and most forceful effort yet, by the US to persuade pharma companies to onshore their manufacturing and follows action on active pharmaceutical ingredient (API) production and the FDA PreCheck programme to support new sites.
As measures like these, and the pharma import tariff uncertainty that’s been building all year, raise the pressure on the industry many companies have already responded with new construction and investment plans.
Just this week Lilly confirmed Houston as the location for the second of its four new manufacturing sites, having previously chosen a site near Richmond, Virginia for the first.
Earlier this month GSK outlined a $30 billion, five-year plan for R&D and manufacturing investment and Gilead broke ground on a Bay Area manufacturing hub. Those measures add to similar moves from the likes of AbbVie, Amgen, J&J and UCB.
Consequently, as it stands, many pharma companies could be immune from the effects of the new policy, depending on how it is interpreted and how – or if – it is implemented.
It certainly raises plenty of questions and leaves them with little time to be answered. For example, do facilities that have been recently built count? Are extensions to existing sites considered ‘building’? What sort of catchment area does ‘branded pharma products’ cover?
While the abrupt placing of US drug tariff policy front and centre again looks set to have severe repercussions for those companies not currently working on new US pharma manufacturing facilities, it will also leave policymakers around the world working out how to react.
One thing they’ll have to grapple with is what geographical reach the pronouncement will have. Brussels, for example, will want to know if the preliminary deal the EU signed with the US in July will bring it any immunity, given that it wasn’t legally binding.
At the time European Commission President Ursula von der Leyen hailed the agreement as “certainty in uncertain times”, but like US drug tariff policy that claim looks to have been upended.
