Trump announces 100% pharma tariffs

In April, Trump said that pharmaceutical imports would soon be subject to "major" tariffs as part of efforts to drive manufacturing to the United States. Later, he said that planned pharmaceutical tariffs could eventually reach as high as 250%.

We'll be putting initially a small tariff on pharmaceuticals, but in one year — one and a half years maximum — it's going to go to 150% and then it's going to go to 250%," Trump said during an interview with CNBC in August. "We want pharmaceuticals made in our country."

Last week, Trump announced a 100% tariff on branded or patented pharmaceuticals, which will take effect on Oct. 1, unless a company is building a manufacturing facility in the United States. In a post on Truth Social, Trump said that companies that are either "breaking ground" or have facilities "under construction" will be exempt from the tariffs.

Recently, several major pharmaceutical companies, including Johnson & Johnson, Merck, and Novo Nordisk, have announced new investments in U.S. manufacturing, building new facilities in several states.

Generic medications, which make up 90% of U.S. prescriptions, are exempt from the tariffs. Drugs manufactured in Europe are also exempt from the new tariffs. Instead, drugs from the European Union are subject to a 15% tariff, which was set in July. 

Trump pushes drugmakers to lower prices

Outside of tariffs, the Trump administration has also pushed drug manufacturers to commit to a "most favored nation" (MFN) drug pricing policy, which would require companies to sell their medications in the United States at the lowest price they sell in other countries. Companies had until Sept. 29 to commit to the policy.

"I believe it's likely that there will be some announcements of voluntary commitments after this deadline, but the actual significance of them remains to be seen," said Ian Spatz, national adviser at Manatt Health and a former VP at Merck.

Currently, Pfizer is expected to be the first drugmaker to announce lower prices for several of its medications — with others likely to follow suit. According to a White House official, Pfizer's lowered prices could benefit as many as 100 million patients. The company is also expected to announce a new $70 billion investment in U.S. manufacturing.

"It's a win for American patients, a win for American leadership, and it's a win for Pfizer because it provides the certainty and stability we need to continue advancing new breakthrough medicines for patients," said Pfizer spokesperson Amy Rose.

Outside of directly lowering their prices, some drugmakers have implemented programs that allow U.S. patients to directly buy certain medications at lower prices. Some companies, including Bristol Myers Squibb and Eli Lilly, have also announced plans to increase the prices of some of their medications overseas instead of lowering prices in the United States.

The Trump administration may also introduce new drug pricing policies aimed at lowering costs. According to the New York Times, the administration recently published — and then later deleted — a notice that described a new "global benchmark for efficient drug pricing (GLOBE) model" under HHS.

Separately, the Wall Street Journal reported that the White House is planning to launch a new direct-to-consumer website for prescription drugs called TrumpRx. TrumpRx will allow patients to pay cash for certain medications directly through a government website. The medications will be offered at a discount negotiated by the government.

So far, it's not clear how many drugs will be offered through the website or how beneficial it will be for the majority of Americans who already have private or public insurance.

"President Trump is leveraging the power of the federal government to drastically cut drug prices for everyday Americans," said Kush Desai, a White House spokesperson. "Democrats talked the talk for decades about drug prices, but only President Trump is actually walking the walk."