Trump Administration Announces 100% Tariffs on Brand-Name Drugs with Carveouts

Apr 3, 2026

President Trump announced 100% tariffs on brand-name pharmaceutical imports and their active ingredients, set to take effect as soon as Thursday, April 3, 2026, as part of efforts to relocate drug manufacturing to the United States. The policy includes numerous carveouts: companies negotiating most-favored nation pricing deals are exempt, those moving production to the U.S. face only 20% tariffs (rising to 100% in 2030) with HHS approval, and generic drugs, orphan drugs, fertility medications, and multiple specialty drug categories are excluded entirely. The announcement coincides with the FDA's April 1, 2026 approval of Eli Lilly's obesity pill orforglipron (marketed as Foundayo), which offers more flexible dosing than competitor Novo Nordisk's Wegovy and was fast-tracked under a voucher program for drugs aligned with national health priorities. The tariff policy creates competitive pressure on pharmaceutical companies to either relocate manufacturing, negotiate pricing deals, or fall within the extensive exemption categories to avoid the punitive 100% rate.

100% Tariffs on Patented Drugs with Exemptions and Carveouts

▪The Trump administration tariffs on patented medicines will not apply to other specialty drugs as approved by the HHS secretary.
▪The Trump administration tariffs on patented medicines will not apply to companies that have struck most-favored nation deals to sell drugs in the U.S. at similar prices to other wealthy countries.
▪The Trump administration tariffs on patented medicines could be announced as soon as Thursday, April 3, 2026.
▪The 20% tariff rate for companies moving production to the U.S. would rise back to 100% in 2030.
▪The Trump administration tariffs on patented medicines will not apply to fertility medications.
▪The Trump administration tariffs on patented medicines will not apply to companies negotiating most-favored nation deals until the end of Trump's term in office.
▪Companies that agree to move production of patented medicines to the U.S. will have their tariff rate cut to 20% if the plan is approved by the U.S. Secretary of Health and Human Services.
▪The Trump administration prepared an order to impose a 100% tariff on imports of patented medicines and their active ingredients.

FDA Approval of Eli Lilly's Obesity Pill Orforglipron

▪Novo Nordisk's Wegovy pill must be taken in the morning at least 30 minutes before any food or drinks other than water.
▪Eli Lilly's orforglipron does not carry restrictions on timing of food or drink consumption.
▪The U.S. Food and Drug Administration approved Eli Lilly's obesity pill orforglipron on Wednesday, April 1, 2026.
▪Eli Lilly's orforglipron will compete against Novo Nordisk's Wegovy pill.
▪Investors are hoping that orforglipron will be a major growth catalyst for Eli Lilly.
▪Eli Lilly's orforglipron was approved under the FDA voucher program, which grants speedy reviews to drugs aligned with national health priorities.

Perspective of Smaller drugmakers negotiating most-favored nation deals

▪Smaller drugmakers are negotiating most-favored nation pricing deals with the Trump administration to avoid 100% tariffs on their brand-name drugs.

Perspective of Trump Administration

▪The Trump administration designed the 100% tariff on brand-name pharmaceutical imports to bring drug manufacturing back to the United States.
▪The Trump administration created extensive carveouts from the pharmaceutical tariffs for generic drugs, orphan drugs, fertility medications, and multiple specialty drug categories.