Trump administration sets up to 100% tariffs on some imported drugs, with many companies exempt

The Trump administration on Thursday imposed new tariffs on branded drugs from pharmaceutical companies that have not struck deals with the president to lower their U.S. drug prices — a long-awaited move that will likely only affect a small portion of drugmakers.

"We need to make sure that our drug supply is protected, secure and domestic," a senior administration official, who declined to be named, told reporters on Thursday. "That is what we're doing."

Also on Thursday, the Trump administration changed how tariffs are calculated on imported raw materials made from steel, aluminum, and copper, and on imported products that contain those metals.

Patented medications and their active ingredients face a 100% tariff under the pharmaceutical plan, but there are pathways for drugmakers to reduce or avoid the levies, the official said.

The administration will impose a 20% tariff on companies that plan to onshore production, which would increase to 100% four years from now. Drugmakers that have fully executed drug pricing deals or are currently negotiating with the Health and Human Services Department and are building manufacturing domestically would be exempt from the tariffs. New domestic plants must be completed by January 2029 to qualify, the official said.

Larger drugmakers have 120 days before the 100% tariff rate goes into effect, the official said, but the administration expects more companies to announce reshoring plans before then. Smaller drugmakers, which rely on contract manufacturers, have 180 days before that rate hits.

Meanwhile, some countries that have struck larger trade deals with the U.S. will face different pharmaceutical levies, with a 15% rate in the European Union, Japan, Korea and Switzerland. The U.K. will face a 10% tariff, in part because its government has raised the price of what it will pay for pharmaceuticals, the official said.

"Those countries, the production can stay in those countries because they've made a bigger trade deal with America," the official said.

Genetic products, biosimilars and related ingredients are not subject to tariffs at this time, but that will be reassessed in one year, the White House said in a fact sheet.

Certain specialty pharmaceutical products, including those for animal health and treatments for rare conditions, will be exempt from levies if they come from countries with trade deals or "meet an urgent public health need," the fact sheet said.

The plan represents another shift in Trump's aggressive trade strategy, more than a month after the Supreme Court struck down the global levies he imposed in 2025, which excluded the pharmaceutical industry. The sector-specific tariffs follow a Commerce Department investigation that determined certain pharmaceutical imports pose a national security risk to the United States.

Since November, more than a dozen major drugmakers, including Eli Lilly, Pfizer and Novo Nordisk, have inked deals with Trump to lower the prices of new and existing medicines. Those agreements are part of the president's "most favored nation" policy, which ties U.S. drug prices to cheaper ones abroad, and exempts the companies from tariffs for three years.

The Trump administration official said 13 companies have already signed a drug pricing agreement, while negotiations with another four drugmakers are progressing. There are already $400 billion in commitments to reshore manufacturing so far in the sector during Trump's term, the official added.

Prior to the landmark drug pricing deals, Trump repeatedly threatened duties on pharma imports. Those threats – and efforts to get into the president's good graces – fueled a new wave of U.S. manufacturing investments from the pharmaceutical industry. Those commitments come at a time when domestic drug manufacturing had shrunk significantly.

In the separate tariff action related to metals, the duty remains at 50% on raw material made from steel, aluminum and copper — such as aluminum sheets or steel coils — but it will be on the full price paid by U.S. importers.

The senior administration official, during a call with reporters on Thursday, said the adjustment is being made to prevent foreign sellers from undervaluing their products to pay less in tariffs.

Imported finished products containing more than 15% of those metals will now be subject to a 25% tariff on the total value of the item. The prior duty was 50% only on the value of the metal in the product.

Finished products that contain less than 15% of those metals will not be subject to a tariff.

A senior administration official said the changes in tariffs on the metals should not affect the cost of goods, but non-government estimates suggest that it will modestly raise the effective duty rate.

The Committee for a Responsible Federal Budget estimates that the change will raise an additional $70 billion in federal revenue over the next 10 years.

— CNBC's Megan Cassella contributed to this article.