New U.S. Pharma Tariff Leaves Small Biotech Firms Facing Full 100% Duty
A 100% tariff on imported drugs took effect at the end of September. While large U.S. drugmakers can postpone payments until early 2029 through most-favored-nation agreements, many smaller biotech companies remain uncertain about how to qualify for exemptions.
The Trump administration announced a Section 232 tariff in April that imposes a full duty on imported patented medicines and their active ingredients. The White House outlined two relief routes: securing a most-favored-nation (MFN) deal to match prices in other wealthy nations or moving production to the United States. Companies that signed MFN agreements were supposed to start paying the tariff in July, but their contracts now push payments out to early 2029. This deferment benefits the biggest U.S. drugmakers, leaving smaller biotech firms to bear the full levy without clear guidance on exemption procedures.
Why it matters
The tariff could raise drug costs for patients and strain small biotech firms, affecting drug availability and innovation.
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