A broad tariff on imported pharmaceuticals took effect at the end of September, and some biopharma companies and the industry group representing them say many are being left in the dark on how to obtain exemptions. The Trump administration announced a 100 percent Section 232 tariff in April, covering imports of patented drugs and their active pharmaceutical ingredients. At the time, the White House offered pathways to reduce the tariff burden, including striking a most-favored-nation deal to sell drugs in the U.S. at prices similar to other wealthy countries or agreeing to bring production to the United States.
The structure favors the companies that signed up early. Firms that made MFN agreements were initially supposed to begin paying tariff costs in July but now are not on the hook for payment until early 2029 under their agreements, which exempts many of the biggest U.S. drugmakers from the immediate hit. Smaller biotech firms, which lack the leverage and U.S. manufacturing footprints to strike such deals, face the levies now.
The direction is consistent with the rest of the week’s Washington news: PhRMA is suing over the MFN pricing pilot while its largest members benefit from MFN tariff relief, leaving the pricing pressure and the cost pressure distributed to different ends of the industry.