President Donald Trump has announced a phased tariff plan targeting generic drugs imported into the United States, beginning with a zero-tariff window starting August 1.
Under the plan, generic drug imports will face no tariffs for two years, with a 100% levy taking effect in August 2028 before rising to 200% a year later.
The White House said the policy will be implemented under Section 232 authority, framing it as a national security measure to drive domestic pharmaceutical manufacturing.
Trump described the escalating tariff schedule as “a penalty” for companies that fail to build plants and facilities in the United States within the grace period.
The two-year window is designed to give generic drugmakers sufficient time to shift production onshore before the heavier tariffs begin to bite.
Tariffs on patented and branded drugs will remain unchanged under the new announcement, Trump confirmed, keeping the existing 100% levy on those products in place.
Generic medicines account for roughly 90% of all prescriptions filled in the United States, though they represent a smaller share of overall drug spending due to their lower price points.
Industry representatives have warned that many manufacturers have limited room to absorb tariffs as high as 100% or 200%, given the intensely competitive nature of the generics market.
Generic manufacturers typically compete on price, manufacturing efficiency, and scale after patents expire, meaning even relatively small cost increases can have an outsized impact on profitability.
It remains unclear whether the tariff plan will extend to biosimilars or active pharmaceutical ingredients, with the US Pharmacopeia noting that only 12% of total prescription API volume is currently manufactured in the United States.
Questions also surround the legal authority Trump would use to impose the projected 200% tariff, which is scheduled to take effect in August 2029, several months after the end of his current term.
More than a dozen major drugmakers, including Eli Lilly (LLY), Pfizer (PFE), and Novo Nordisk (NVO), have already struck separate deals with Trump to lower the prices of new and existing medicines.
The administration has also recently launched a direct-to-consumer discount drug sales platform it has branded as TrumpRX, adding another dimension to its broader push to reshape pharmaceutical pricing in the United States.