How the 2026 Pharmaceutical Tariff Works
The Section 232 pharmaceutical proclamation creates 6 distinct tariff tiers. Here is a plain-English breakdown of each tier — who qualifies, what they pay, and when it takes effect.
Default Brand-Name Tariff
Who qualifies
All patented brand-name drugs not covered by any other exemption.
Legal authority
Section 9903.04.60
Effective date
September 29, 2026
This is the tariff rate that applies by default. If a drug is listed in the FDA Orange Book or Purple Book (meaning it is covered by a valid, unexpired US patent), and the manufacturer has not signed an MFN deal or received a country-specific exemption, the 100% tariff applies to its import cost.
Approved US Onshoring Plan
Who qualifies
Manufacturers with an approved plan to move production to the United States.
Legal authority
Section 9903.04.61
Effective date
September 29, 2026
Companies that submit and receive approval for a concrete plan to establish US manufacturing facilities qualify for a reduced 20% tariff rate while the plan is being executed. This is a transitional rate designed to incentivize domestic investment without immediately imposing the full tariff burden.
EU / Japan / Korea / Switzerland Manufacturer
Who qualifies
Drugs manufactured in EU member states, Japan, South Korea, Switzerland, or Liechtenstein.
Legal authority
Section 9903.04.62
Effective date
September 29, 2026
Allied trading partners in Western Europe and East Asia receive a preferential rate of 15% rather than the 100% default. This reflects existing trade relationships and the lower security risk associated with pharmaceutical supply chains from these countries.
United Kingdom Manufacturer
Who qualifies
Drugs manufactured in the United Kingdom.
Legal authority
Section 9903.04.63
Effective date
September 29, 2026
The UK receives a slightly lower rate than the broader EU/Japan group, at 10%. This reflects the ongoing post-Brexit trade relationship between the United States and United Kingdom and the special importance of the bilateral pharmaceutical supply chain.
MFN + Onshoring Agreement
Who qualifies
The 13 Annex III companies that signed MFN pricing and onshoring deals.
Legal authority
Annex III Agreements
Effective date
July 31, 2026 (earlier than all other tiers)
AbbVie, Amgen, AstraZeneca, Bristol Myers Squibb, Boehringer Ingelheim, Eli Lilly, EMD Serono, Genentech, Gilead Sciences, Merck, Novartis, Novo Nordisk, and Sanofi have all signed bilateral agreements committing to MFN (lowest global) drug pricing for Americans and concrete US manufacturing investments. In exchange, their drugs are exempt from tariffs — but note the earlier effective date means these companies' deals kick in July 31, 2026.
Generics, Biosimilars & Specialty Categories
Who qualifies
All generic drugs, biosimilars, orphan drugs, nuclear medicines, plasma-derived therapies, fertility treatments, cell & gene therapies, antibody drug conjugates (ADCs), and CBRN countermeasures.
Legal authority
Section 9903.04.66
Effective date
N/A — permanently exempt
These categories are explicitly carved out from Section 232 tariffs entirely. The most important category for most Americans is generics and biosimilars: if your drug has a generic equivalent, it is fully exempt and no tariff applies — regardless of where it is manufactured or who makes it.
Implementation Timeline
April 2, 2026
Proclamation signed
Trump signs Section 232 pharmaceutical tariff proclamation.
July 31, 2026
Annex III deals effective
13 companies with MFN deals (AbbVie, Merck, Lilly, etc.) — 0% rate takes effect.
Sept 29, 2026
Full tariffs effective
100% default tariff applies to all other brand-name patented drugs.
Jan 20, 2029
MFN deals expire
Annex III company MFN agreements expire unless renewed. Deals may revert.
April 2, 2030
Onshoring plans revert
Companies with 20% onshoring plan exemptions revert to 100% unless US production is operational.
What Is a "Patented Pharmaceutical Article"?
The tariff applies specifically to patented pharmaceutical articles — defined as drugs that are: (1) listed in the FDA Orange Book (for small-molecule drugs) or Purple Book (for biologics), and (2) subject to at least one valid, unexpired US patent. Once a drug's patents expire and generic or biosimilar versions are approved, the drug is no longer covered by the tariff.
This is why generic drugs and biosimilars are exempt — by definition, they are not covered by patents. They are manufactured after the originator's patents expire and are approved by the FDA as therapeutically equivalent alternatives.