President Donald Trump issued an executive order establishing a new tariff on brand-name drugs in order to reduce U.S. reliance on imports.
The Thursday order cited national security concerns to justify the new tariffs, but certain drugs are exempted, including generic drugs and orphan drugs.
A pharmaceutical trade group condemned the order and defended the impacted drug imports.
“I have determined that it is necessary and appropriate to impose a 100 percent ad valorem duty rate on the import of patented pharmaceuticals and associated pharmaceutical ingredients,” the president said in the executive order.
The far lower 15% tariff will apply to drugs from the European Union, Japan, South Korea, or Switzerland and Liechtenstein.
Drugs from the United Kingdom will carry an unspecified rate determined by a U.S.-U.K. agreement negotiated by the president.
“President Trump’s agreement with the United Kingdom is another big step toward ending a system that forces Americans to pay more so others can pay less,” said Health and Human Services Secretary Robert F. Kennedy Jr.
A pharmaceutical trade group condemned the order and defended the impacted drug imports.
“Tariffs on cutting-edge medicines will increase costs and could jeopardize billions in U.S. investments announced in the last year. Every dollar spent on tariffs is a dollar that can’t be invested in communities across the country,” said PhRMA president and CEO Stephen J. Ubl.
“The innovative biopharmaceutical sector has a robust U.S. manufacturing footprint. In fact, two-thirds of the medicines that are consumed in the U.S. are made in America,” he added.
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“And when innovative medicines or their inputs are sourced from other countries, these products overwhelmingly come from reliable U.S. allies, like Europe and Japan,” Ubl concluded.
In February, the Supreme Court struck down the president’s tariffs that invoked the International Emergency Economic Powers Act. The 6-3 ruling was written by Chief Justice John Roberts.
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