Trump says pharmaceutical tariffs are coming. Here's what to expect

President Donald Trump’s sweeping tariffs are headed to the medicine aisle next.

On Monday, Trump announced his plans to place tariffs on pharmaceutical imports “within the next two weeks,” signing an executive order designed to boost drug companies’ manufacturing in the U.S. While the exact tariff rates haven’t yet been specified, the president has suggested they could be as high as 200%.

“We don’t want to be buying our pharmaceuticals from other countries because if we’re in a war, we’re in a problem, we want to be able to make our own,” Trump said in a fact sheet. “As we invest in the future, we will permanently bring our medical supply chains back home. We will produce our medical supplies, pharmaceuticals, and treatments right here in the United States.”

The president’s executive order gives U.S. agencies a clear message: Move faster. Trump has directed the FDA to speed up approvals for domestic manufacturing facilities while promising more surprise inspections of overseas plants and raising inspection fees for foreign drugmakers.

Meanwhile, the EPA is being told to fast-track construction permits for pharmaceutical facilities. The White House has estimated that it can take five to 10 years to build manufacturing capacity for pharmaceuticals, which it says is “unacceptable from a national security standpoint.”

The Commerce Department launched a Section 232 investigation into pharmaceutical imports in April, paving the way for these tariffs. That’s the same provision the Trump administration previously used to justify sweeping tariffs on steel and aluminum in 2018.

“Pharma companies are going to come roaring back, they’re coming roaring back, they’re all coming back to our country, because if they don’t, they got a big tax to pay,” Trump said in his original “Liberation Day” tariff announcement on April 2.

But the president’s move to promote U.S. manufacturing by placing tariffs on the pharmaceutical industry could backfire.

Big Pharma faces big stakes

Pharmaceutical companies are already navigating tight margins and global competition. Broad tariffs on imported drugs could lead to higher prices for patients and supply disruptions in a system that’s already under strain. Drug companies had previously enjoyed favorable trade terms, particularly under a 1994 World Trade Organization agreement that set low or zero tariffs on finished products and key active ingredients.

In 2023, the U.S. imported more than $200 billion of pharmaceutical products — and about 73% came from European countries that have long served as manufacturing hubs for the industry. Ireland, Germany and Switzerland were the top three jurisdictions for U.S. pharmaceutical imports, according to consulting firm PwC. And many of the active pharmaceutical ingredients in medicines that are sold in the U.S. are made abroad, particularly in India and China.

The tariffs’ implications could be significant for companies based in the United Kingdom and Ireland. The U.K. exported $8.1 billion in pharmaceuticals (one of the sovereign state’s top imports) to the U.S. in 2023, with around $4.1 billion originating from U.K.-based production. Global giants GSK (GSK+1.80%) and AstraZeneca (AZN+0.03%) are both based in the U.K., making them vulnerable to any proposed import taxes.

Both companies plan to lobby hard to shield the sector from such tariffs, joining a group that successfully secured temporary exemptions for pharmaceuticals from a 10% baseline tariff that Trump previously levied on many other foreign goods.

But with the president’s tariff announcement looming, the pressure is on for these companies to either relocate manufacturing to the U.S. or risk facing a hefty price tag.

Higher prices and more disruptions

A 2023 analysis conducted by Ernst & Young found that a 25% tariff on pharmaceutical imports could lead to an increase of up to $51 billion a year in drug costs, potentially raising prices for consumers by as much as 12.9%.

Giovanni Barbella, the global head of strategy and supply chain at the Swiss generic drugmaker Sandoz (NVS-0.56%), told The Guardian that tariffs would lead to supply disruptions and price increases, hitting U.S. patients hardest.

“We are producing products on a very tight margin,” Barbella said. “That’s the nature of our industry. So ultimately, higher production cost, including the cost of tariffs, will lead to higher prices.”

The Association for Accessible Medicines warned in February that tariffs could strain cash-strapped generic drugmakers and distributors, potentially leading to increased costs for patients and disruptions in the supply chain.

“There can be even more supply disruption, because some players can leave the [U.S.] market and focus on markets where they can make more business,” Barbella added. “So ultimately, the risk is that the U.S. patient will suffer the most.”

The U.S. is already battling a record number of drug shortages, from cancer medications to antibiotics. Nearly 270 drugs were on the American Society of Health-System Pharmacists’ official list of active drug shortages as of early 2025.

Many of these shortages stem from global supply chain issues, including reliance on single-source manufacturers overseas. Tariffs could worsen the situation by discouraging imports or driving up costs to unsustainable levels. For patients, this could mean delayed treatments or forced switches to less effective alternatives. And for hospitals and insurers, it could translate to higher costs and more administrative headaches.

Mark Samuels, the CEO of Medicines UK, which represents Britain-based generic drugmakers, told The Guardian that, “in an insurance-based system as the U.S. has, if medicine costs increase and insurance runs out, then that does increase the risk that people either can’t afford to complete their cancer treatments or pay for it altogether.”

Those comments — and the substantial risks rising drug costs pose — were echoed by Gareth Sheridan, the CEO of the Irish-founded pharmaceutical company Nutriband.

“These types of treatments can’t afford a disruption in the global supply chain,” Sheridan told the BBC. “As a comparable situation: tariffs on automobiles. You can’t afford a BMW? Buy a Ford and you can still get to work. If you have a 25% hike on chemotherapy and you can’t afford your treatment any more, what’s the alternative? I mean, ultimately, people are going to die.”

Drugmakers are being cautious

Some major pharmaceutical companies are already trying to adapt, announcing major investments in U.S.-based manufacturing.

To insulate themselves from any potential tariffs, Swiss pharma giants Roche (RHHBY-0.05%) and Novartis are committing $50 billion and $23 billion, respectively, to U.S. investments over the coming years. In November, AstraZeneca announced a $3.5 billion investment and recently confirmed it will shift production of certain U.S.-bound drugs from Europe to the U.S.

Meanwhile, U.S.-based Eli Lilly (LLY+0.74%), the producer of diabetes and weight-loss medications Mounjaro and Zepbound, is allocating at least $27 billion to build four new manufacturing facilities in the U.S.

Johnson & Johnson (JNJ-0.53%) plans to invest $55 billion in U.S. manufacturing and research over the next four years. The company, which has its headquarters in New Jersey, could be especially affected by any new U.S. tariffs due to its extensive production footprint across Europe, including operations in the U.K., Ireland, Switzerland, Italy, and Belgium.

But even with these moves, shifting production on a large scale is neither quick nor easy.

Albert Bourla, Pfizer’s (PFE+1.72%) CEO, said on the company’s first-quarter earnings call that the New York-based firm could undertake “tremendous investments” in the U.S. if there were clearer trade policies and if tariff threats were removed. The company’s chief financial officer, Dave Denton, said that the already existing tariffs are expected to cost the company around $150 million in 2025.

And analysts say that’s a real risk: If costs go up and regulatory uncertainty grows, drugmakers may delay projects or pass costs onto consumers.

Novo Nordisk (NVO+1.61%), the Danish company behind blockbuster diabetes and weight loss drugs Ozempic and Wegovy, could also feel the squeeze. While it has a growing U.S. presence — including a major site in North Carolina and more than 10,000 U.S.-based employees — it imports some finished products and components from Europe.

Still, Novo Nodisk CEO Lars Fruergaard Jørgensen said in an interview with Bloomberg TV that the company’s operations in the U.S. would be sufficient “to a large degree. ... The base case is that this is something we can handle.”

Trump has yet to formally specify a rate for these pharmaceutical tariffs.

The full consequences of the administration’s policy will unfold as pharmaceutical companies adjust their strategies in the coming months. With significant stakes at play for both the U.S. economy and global health systems, it remains to be seen how the president’s approach will ultimately shake out. For now, drugmakers and consumers alike must prepare for what could be a bumpy road ahead.