On September 25, 2025, President Trump announced plans to impose a 100 percent tariff, effective October 1, on branded or patented pharmaceutical products imported into the United States unless manufacturers are already “building” a domestic facility.¹ While the announcement captured widespread attention, recent reporting suggests that enforcement could be delayed, selectively applied, or even paused altogether as the administration finalizes exemption criteria and navigates political and legal challenges.²
What It Means for Plan Sponsors
At this stage, the proposed tariffs have no direct impact on pricing or supply. Potential effects will depend heavily on how exemptions are defined and implemented. Drug costs could rise modestly if manufacturers pass through tariff-related expenses or if domestic production proves more expensive than overseas manufacturing. Supply chain risks remain a consideration for therapies with limited domestic capacity, though wholesalers report stable inventories and no immediate disruptions.
Outlook & Next Steps
Many implementation details are still being developed, including whether tariffs will apply to finished products or active ingredients and which product classes may ultimately be affected. Stakeholders across the pharmaceutical industry are lobbying heavily, and political, legal, or logistical challenges could shape how the tariffs are ultimately applied.3 Industry experts expect additional guidance in the coming weeks as agencies refine rulemaking and consider exemptions for essential medicines.
For now, no immediate action is required from plan sponsors and brokers. Given ample inventories, high generic utilization, and the likelihood of broad exemptions on many brand name drugs, the near-term risk to pricing increases related solely to tariffs appears highly unlikely. We will continue to monitor developments closely and update our brokers and clients as the policy landscape evolves.
Sources:
3Trump drug tariff draws backlash from NJ pharma industry – NJBIZ
