President Donald Trump has ordered tariffs of up to 100 percent on imports of patented pharmaceuticals and associated active pharmaceutical ingredients (APIs), citing a national security risk from heavy reliance on foreign-made medicines.

Acting on a section 232 investigation by the Secretary of Commerce, the proclamation says the United States depends on overseas manufacturing for 53 percent of patented drug products distributed domestically and produces only 15 percent of patented APIs by volume. The Administration argues that exposure leaves both civilian and military healthcare vulnerable to supply shocks.

What’s being tariffed and when

• A 100 percent ad valorem duty will apply to patented medicines and associated ingredients listed in Annex I of the proclamation.
• The tariffs take effect at 12:01 a.m. EDT on July 31, 2026 for companies named in Annex III, and on September 29, 2026 for others. The measures remain in place unless modified or terminated.

Who gets lower rates or exemptions

• Onshoring plans: Companies with Commerce-approved plans to onshore production will face a 20 percent tariff, rising to 100 percent four years after today’s date.
• MFN pricing + onshoring: Firms that have signed, or are close to signing, “most-favoured-nation” (MFN) US pricing agreements and onshoring commitments with Health and Human Services and Commerce will face a zero tariff until January 20, 2029. Agreements already listed in Annex II qualify.
• Allied jurisdictions: Products of the EU, Japan, South Korea, and Switzerland/Liechtenstein face a 15 percent rate unless a lower rate applies; the UK rate is 10 percent and could fall to zero if a future US‑UK pharmaceutical pricing deal is finalised.
• Specialty products: Orphan‑only drugs, nuclear medicines, plasma‑derived therapies, fertility treatments, cell and gene therapies, antibody‑drug conjugates, CBRN medical countermeasures, other specialty drugs identified by Commerce, and animal health products can be zero‑rated if certain trade/security or urgent‑need tests are met.
• Generics: Generic medicines, biosimilars and their ingredients are excluded from section 232 tariffs “at this time.”

Enforcement and administration

• Commerce and Health and Human Services will negotiate company- and country‑level arrangements and report progress within 90 days.
• Commerce can raise rates for firms or jurisdictions that fail to meet commitments, and will publish determinations and any UK rate changes in the Federal Register.
• US Customs and Border Protection will administer the tariffs; drawback is allowed. Goods entering foreign trade zones after the effective date must be admitted as privileged foreign status. US‑origin pharmaceutical re‑imports are not subject to these tariffs.

Trade architecture

• The proclamation folds tariff treatment into existing or contemplated agreements with the EU, Japan, South Korea, Switzerland/Liechtenstein, and a prospective UK deal.
• It preserves the option to adjust measures over time under section 232, including if negotiations stall or prove ineffective.

What this could mean here

• The move targets imports into the United States. It does not directly change pricing or access in New Zealand.
• Most Pharmac‑funded medicines are generics; those are not covered by these tariffs.
• Multinationals supplying the US may shift manufacturing or pricing strategies to meet onshoring and MFN terms. Any flow‑on effects to smaller markets like ours are uncertain and will depend on the detailed annex lists, company decisions, and how quickly negotiations convert into exemptions.

What we don’t yet know

• Annexes I–IV will determine precisely which products, companies and timelines are captured. Commerce also plans to publish approval criteria for onshoring plans.
• The Administration can add or remove specialty categories and alter rates based on compliance, so the tariff landscape may change before the September start date for most firms.