Washington, D.C. — The White House escalated pressure on pharmaceutical companies Thursday by imposing steep new tariffs tied to drug pricing and domestic manufacturing requirements.
President Donald Trump signed an executive order requiring a 100% tariff on branded prescription drugs imported into the United States unless companies agree to government pricing rules or shift production domestically. The policy is part of a broader effort to reduce drug costs and increase U.S.-based manufacturing.
Under the order, major drugmakers have 120 days to comply, while smaller firms are given 180 days. Companies that move production to the U.S. can qualify for reduced tariffs, while those that sign “most-favored-nation” pricing agreements with the Department of Health and Human Services may avoid tariffs entirely.
Some global firms, including Pfizer and Eli Lilly, have already reached agreements with the federal government, securing temporary exemptions. However, many mid-sized and smaller companies remain exposed to the new penalties.
The policy maintains exemptions for generic drugs for at least one year, as they account for more than 90% of prescriptions in the U.S., according to federal data. Certain specialty drugs are also excluded.
Industry groups warned the move could create unequal conditions, favoring large pharmaceutical firms with existing agreements. Critics argue smaller companies may struggle to absorb higher costs or rapidly shift production, raising concerns about market disruption and drug availability.
The administration has framed the policy as necessary to address significantly higher U.S. drug prices compared to other developed nations.
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