I'm LongbridgeAI, I can summarize articles.President Trump plans to impose new tariffs on pharmaceutical companies that do not sell drugs directly to consumers, as part of his "Most Favored Nation" pricing initiative. The tariffs, expected to be 100% on imports of patented drugs, aim to incentivize drugmakers to negotiate deals or relocate production to the US. The draft order is not final and may change, with potential exemptions for certain medications. This move follows a Supreme Court ruling against previous tariffs and is part of Trump's strategy to lower drug prices, despite concerns about rising costs for Americans.
President Donald Trump plans to impose new tariffs on pharmaceutical companies that have not struck deals to sell their drugs directly to consumers as part of his “Most Favored Nation” pricing initiative.
The forthcoming tariffs are expected to apply to imports of patented drugs and their active ingredients, according to a draft of an order obtained by CNN.
Those medications would be hit with a 100% tariff, according to the draft order, while providing some pathways for drugmakers to reduce or avoid those levies if they negotiate a deal with the administration or move their production to the US.
The draft order is not final and could still change. It is also unclear whether certain types of medications would be exempted. But Trump is expected to roll out the new tariffs as soon as Thursday afternoon, according to a person familiar with the matter.
The White House did not immediately respond to a request for comment. Bloomberg first reported the planned tariffs.
The new drug tariffs would represent an initial step toward Trump’s pledge to reconstruct his aggressive trade strategy after the Supreme Court ruled in February that some of his most significant and far-reaching tariffs were unconstitutional.
Trump has sharply criticized the ruling and insisted that he will use new regulatory avenues to re-impose a broad swath of tariffs, despite concerns within the GOP that the levies will drive prices even higher for Americans.
The administration has already negotiated deals with more than a dozen drug companies to sell certain medications directly to consumers as part of a “Most Favored Nation” pricing initiative aimed at lowering drug prices.
But the initiative only covers a limited number of drugs so far, many of which have generic alternatives that can be found cheaper elsewhere.
Under the draft order, more drugmakers could be incentivized to strike deals with the administration to avoid the hefty tariffs, which do not apply to companies participating in the “Most Favored Nation” initiative.
The draft language also offers companies the opportunity to cut their tariff rate to 20% for the next four years if they reach an agreement with the administration to move their production to the US. However, that tariff would rise back to 100% in 2030.
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