Trump Administration Announces Pharmaceutical Tariffs
On September 25th Donald Trump announced, via a Truth Social post, a 100% tariff on any branded or patented pharmaceutical products starting October 1, 2025. The announcement included an exception for pharmaceutical companies building manufacturing plants in the United States, which he defined as “breaking ground” and/or “under construction.” It is currently unclear whether a pharmaceutical company’s promise to build in the country will be sufficient to avoid being subject to the tariffs or if companies located in countries with already negotiated trade deals will be impacted. Without this clarification, it is not immediately clear the impact the announcement will have on those companies and the cost of their products.
Based on the post, generic drugs manufactured outside the United States appear to be exempt, though additional clarification is still needed.
What we know:
Pharmaceutical companies have been anticipating an announcement related to tariffs and have increased their production as a result. With that said, and despite the exceptions outlined in the President’s post, there is a possibility consumers will see an increase in the cost of their prescriptions and/or a decrease in the drug’s availability. However, without additional details from the White House by way of an official order, many questions go unanswered at this time.
Innovative is working closely with carriers and PBMs to monitor the applicability of the announcement and impact to clients and their plans. We will notify clients as more details become available.
