President Donald Trump signed an executive order on Thursday that could impose catastrophic 100% tariffs on imported patented medicines, using the threat of massive levies to force global pharmaceutical giants into domestic manufacturing and aggressive price-cutting agreements.
The order establishes a tiered "carrot-and-stick" system designed to reshore the production of critical pharmaceuticals and their active ingredients.
Companies that sign a “most favored nation” (MFN) pricing deal and are actively constructing U.S. facilities will be exempt from the duties.
However, those that engage in U.S. construction without a pricing deal will face an immediate 20% tariff—scaling to 100% within four years—while companies that refuse both face the maximum 100% penalty.
The administration has provided a grace period for negotiations: 120 days for large-cap pharmaceutical entities and 180 days for mid-sized and smaller firms.
According to a senior administration official, the government has already reached 17 preliminary pricing deals with major manufacturers, 13 of which have been finalized.
Industry leaders such as Pfizer, Eli Lilly, and Bristol Myers Squibb are reportedly among those that have already engaged in talks to secure lower levies in exchange for price concessions on new drugs.
President Trump justified the move on national security grounds, writing in the order that the reliance on foreign-produced medicine poses a "threatened impairment" to the country’s safety.
The announcement coincides with the first anniversary of "Liberation Day," the 2025 date when the administration first unveiled a sweeping global tariff regime, much of which was subsequently overturned by the Supreme Court in February 2026.
The pharmaceutical industry responded with immediate alarm.
Stephen J. Ubl, CEO of the trade group PhRMA, warned that taxing cutting-edge medical innovation would inevitably "increase costs and could jeopardize billions in U.S. investments."
Ubl noted that the majority of imported medicines are sourced from reliable U.S. allies rather than adversarial nations, suggesting the national security argument may be overstated.