Donald Trump is threatening 100% tariffs on pharmaceutical companies that have not struck deals to lower US drug prices, a move that could have severe knock-on effects for the UK's National Health Service (NHS). The new tariff will apply to branded drugs and their active ingredients, while generic drugs—which make up over 90% of medicines sold in the US—will be exempt for at least one year.
Drugmakers that enter pricing agreements with the White House and onshore production will be exempt from the tariffs. Companies planning to increase domestic manufacturing will face a 20% tariff, rising to 100% in four years. The US has already agreed exemptions for 17 drugmakers, including Pfizer and Eli Lilly, with four more still being negotiated.
Large companies have 120 days to negotiate deals to avoid the tariff, while smaller firms have 180 days. However, the Midsized Biotech Alliance of America (MBAA) warned the policy creates an 'unfair two-tiered system of exemptions' benefiting only big companies. MBAA president Alanna Temme said mid-sized drugmakers 'lack diversified portfolios to absorb these sudden cost increases'.
Trump has been pressuring drugmakers through his most-favored-nation policy to lower US prices, which are often nearly triple those in other developed nations. The announcement comes amid consumer pressure over rising prices linked to tariffs and high gas prices from the US-Israel war with Iran.
For the NHS, which relies on globally sourced branded drugs, the tariffs could lead to higher costs or supply shortages. The UK government may need to negotiate directly with US drugmakers or seek alternative suppliers to protect patients.
