Trump prepares pharmaceutical tariffs of up to 100%

The Trump administration is preparing to impose new tariffs on branded drugs from pharmaceutical companies that have not struck landmark deals with the president to lower their U.S. drug prices, CNBC has learned. 

Patented medications and their active ingredients would be hit with a 100% tariff, according to a draft of the document obtained by CNBC. But there are pathways for drugmakers to reduce or avoid the levies if they move their manufacturing to the U.S. or are negotiating deals with the administration.

The proposal is not final, and it is unclear when the Trump administration may announce it, though some reports indicated it could be as soon as Thursday.

Since November, more than a dozen major drugmakers, including Eli Lilly, Pfizer and Novo Nordisk, have inked deals with Trump to lower the prices of new and existing medicines. Those agreements are part of the president’s “most favored nation” policy, which ties U.S. drug prices to cheaper ones abroad, and exempted the companies from tariffs for three years.

As part of the draft plan, the administration will impose a 20% tariff on companies that plan to onshore production, which increases to 100% four years from now.

There are separate rates for the EU, Japan, South Korea, Switzerland and the U.K. based on bilateral deals. Meanwhile, companies that have fully executed deals or are currently negotiating with the Health and Human Services department are exempt from the tariffs.

There will also be zero additional tariffs on generic drugs, according to the draft document.

The White House did not immediately respond to a request for comment on the draft pharmaceutical tariff plan.

Bloomberg first reported on the new pharmaceutical tariffs late Wednesday.