The US is preparing for a tariff war with Big Pharma: 100% duties on brand-name drugs could change the market.

The US is preparing for a tariff war with Big Pharma: 100% duties on brand-name drugs could change the market.

The US will impose 100% tariffs on brand-name drugs: how the pharmaceutical market will change

Starting October 1, 2025, the United States plans to impose 100% tariffs on all branded and patented pharmaceutical products manufactured abroad.
Only those companies that are already building or have launched construction of factories in the country will be exempt.
This move, initiated by Donald Trump, could radically alter the balance of power in the global pharmaceutical industry, where key players—Eli Lilly, Johnson & Johnson, AbbVie, Pfizer, Novartis, and Roche—have relied on global production chains for decades.

Why the US is taking radical measures

In 2024, pharmaceutical imports into the US amounted to approximately $213 billion , almost triple the level of a decade ago (UN Comtrade data). During this time, the domestic share of production has declined: from active ingredients to finished products, a significant portion of the value chain has been shifted to Europe, India, China, and Singapore.

Donald Trump invoked Section 232, the "national security" authority, to launch an investigation into pharmaceutical imports. Previously, the same mechanism was applied to automobiles, steel, and aluminum. Now, the target is pharmaceuticals.

Trump himself stated in Truth Social:

"If a company builds a plant in the US, tariffs won't apply. We encourage domestic production, not overseas."

The US is preparing for a tariff war with Big Pharma: 100% duties on brand-name drugs could change the market.

The significance of the decision: a blow to Big Pharma and the markets

The US pharmaceutical market is the largest in the world, worth over $600 billion (IQVIA, July 2025). The introduction of 100% tariffs means the cost of imported drugs for American consumers could double.

Companies warn of risks:

Price increases. Eli Lilly, in its official comments to the Department of Commerce, stated that tariffs "will deprive manufacturers of capital for innovation."

Supply chain threat. Johnson & Johnson CEO Joaquin Duato noted, "There's a reason why drug tariffs have always been zero. They could cause shortages."

Investor risk. Pfizer and AbbVie indicated that tariffs would discourage global investors from long-term investments in the US.

On the other hand, companies with a strong domestic base (Eli Lilly, Bristol Myers Squibb) may benefit because they have more factories in the US.

Tariff Storm: Gradual Tightening

Trump stated that 100% tariffs are just the beginning. Within a year or a year and a half, they could be increased to 150% , and then to 250%.

This scenario looks like political leverage on pharmaceutical giants, forcing them to accelerate reshoring.

But experts like TD Cowen analyst Steve Scala warn that moving active ingredient production to the U.S. will take five to seven years and billions of dollars in investment.

Impact on global supply chains

Most major manufacturers use a global model:

Novartis and Roche rely on Switzerland and Asia to produce their active ingredients.
Pfizer - some of its production capacity is concentrated in Ireland and Germany.
J&J is strengthening its US operations, but remains heavily dependent on the EU.

If the US imposes harsh tariffs, it will lead to:

interruptions in the supply of vital drugs (oncology, diabetes, cardiology),
shortage of vaccines and biological products,
rising prices for generics and biosimilars.

New investigations and tariff expansion

Pharmaceuticals aren't the only focus of the administration's attention. Trump simultaneously initiated national security reviews of medical equipment, robotics, and personal protective equipment. The list includes N95 masks, syringes, needles, and surgical gloves.

Thus, the pharmaceutical sector is becoming part of a broader US tariff campaign. The EU and Japan have already secured exemptions for a number of products, but preferences for pharmaceuticals are not yet under discussion.

What's in store for the pharmaceutical market?

Rising prices in the US – JPMorgan analysts estimate that tariffs could increase the cost of some drugs by 30–50% as early as 2026 .

Accelerating reshoring. In March 2025, Johnson & Johnson announced a $55 billion investment in American manufacturing and research. Eli Lilly confirmed the launch of new facilities in Indiana.

Risks for patients. Healthcare associations warn that tariff policies could exacerbate shortages of vital medications.

Political factor. Many companies, experts say, will "wait until Trump's term ends" before making strategic decisions.


Conclusion

The introduction of 100% tariffs on brand-name drugs in the United States is not just an economic tool, but a move that affects issues of national security, public health, and global competition.

Pharmaceutical companies are forced to balance the need to relocate production facilities with the risk of financial losses. For patients, this could mean both short-term price increases and long-term disruptions in access to treatment.

One analyst aptly noted:

"Tariffs may bring back factories, but they won't restore patients' trust if the country starts to experience a shortage of drugs."
By Claire Whitmore
September 26, 2025

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