100% Section 232 Tariffs on Patented Drugs, APIs, and Key Materials

April 14, 2026

Section 232 Tariffs on Pharmaceuticals: 100% Duties on Patented Drugs and APIs Starting July 31, 2026

Luis Arandia Jr., Clinton Yu Arnall Golden Gregory LLP + Follow Contact LinkedIn Facebook X Send Embed

Key Takeaways

• Under the Section 232 national security authority, an additional 100% duty will apply to certain patented pharmaceuticals and associated ingredients, including active pharmaceutical ingredients and key starting materials beginning on July 31, 2026.
• Some pharmaceutical products, including generic pharmaceuticals and their associated ingredients and U.S.-origin pharmaceuticals, are not covered by the Section 232 action.
• Pharmaceutical manufacturers, U.S. importers, and companies throughout the pharmaceutical supply chain should act now to assess how the Section 232 tariff action will apply, evaluate mitigation strategies, and prepare for phased implementation.

What Are the New Section 232 Pharmaceutical Tariffs?

On April 6, 2026, the White House issued a presidential proclamation imposing Section 232 national security tariffs on patented pharmaceuticals and associated ingredients, including active pharmaceutical ingredients and key starting materials. The tariff action will affect pharmaceutical manufacturers, U.S. importers, and companies throughout the supply chain.

Section 232 of Trade Expansion Act of 1962 authorizes the president (via a U.S. Department of Commerce investigation) to impose tariffs based on national security concerns. On April 1, 2025, the Department of Commerce initiated the Section 232 investigation into imports of pharmaceuticals and pharmaceutical ingredients and their derivative products.

According to the proclamation, the Department of Commerce completed its investigation and determined that pharmaceuticals and associated active pharmaceutical ingredients (“APIs”), including key starting materials, are being imported into the U.S. in such quantities and under such circumstances as to threaten to impair U.S. national security.

Which Pharmaceuticals and APIs Are Subject to Section 232 Tariffs?

Effective July 31, 2026, an additional 100% duty will apply to the following products of certain companies in Annex III of the proclamation:

• Patented pharmaceutical articles that are subject to a valid, unexpired U.S. patent and:
  • listed in the U.S. Food and Drug Administration’s Approved Drug Products With Therapeutic Equivalence Evaluations (Orange Book); or
  • listed in the FDA’s Lists of Licensed Biological Products (Purple Book).
• APIs and key starting materials for such articles.
• Annex I of the proclamation provides the list of subject patented pharmaceutical products, APIs, and key raw materials organized by Harmonized Tariff Schedule of the U.S. (“HTSUS”) number. Effective September 29, 2026, the additional 100% duty will apply to the same covered articles for other companies.

Which Pharmaceutical Products Are Exempt from Section 232 Tariffs?

• Generic pharmaceuticals and their associated ingredients, which are defined as FDA-approved pharmaceutical articles, and associated ingredients that are not subject to a valid, unexpired U.S. patent and are off exclusivity.
• U.S.-origin pharmaceutical products.
• Certain products classified by HTSUS code listed in Annex IV of the proclamation.
• Products of 13 companies (listed in Annex II) that entered into most favored nation pricing agreements with the U.S. Department of Health and Human Services (“HHS”) will not be subject to any additional Section 232 tariff, until January 20, 2029.

Are There Reduced Tariff Rates by Country or Product Type?

• For subject patented pharmaceuticals and APIs that are products of the European Union, Japan, South Korea, Switzerland, and Liechtenstein, the Section 232 duty rate will be 15%.
• For subject patented pharmaceuticals and APIs that are products of the United Kingdom, the Section 232 duty rate will be 10%.
• For subject patented pharmaceuticals and APIs produced by companies with approved onshore production plans with the secretary of HHS, the additional Section 232 duty rate will be 20% until April 30, 2030.
• For the following specialty products, the Section 232 duty rate will be 0%.
  • Drugs and associated ingredients for all approved indications that are designated as orphan pursuant to the Orphan Drug Act;
  • Nuclear medicines;
  • Plasma derived therapies;
  • Fertility treatments, cell and gene therapies, and antibody drug conjugates;
  • Medical countermeasures related to chemical, biological, radiological, and nuclear threats; and
  • Other specialty pharmaceutical products identified by the secretary of Commerce or pharmaceutical products for animal health imported from a jurisdiction that has a current or forthcoming trade and security framework or that meet an urgent U.S. health need.

FAQs: Section 232 Pharmaceutical Tariffs (2026)

How do companies determine whether a drug is subject to Section 232 tariffs?

Companies must assess whether the product is covered by a valid, unexpired U.S. patent and whether it is listed in the FDA’s Orange Book or Purple Book, along with whether associated APIs or key starting materials fall within the scope of the applicable annexes.

Can companies reduce tariff exposure by changing sourcing or manufacturing locations?

In some cases, yes. Tariff exposure depends heavily on country-of-origin rules, production location, and eligibility for reduced rates or exemptions, including for companies with approved U.S. onshoring plans or operations in preferred jurisdictions.

How will U.S. Customs and Border Protection enforce these pharmaceutical tariffs?

CBP is expected to rely on importer declarations, HTSUS classifications, and supporting documentation, with heightened scrutiny of pharmaceutical imports, particularly where patent status, origin, or product classification is unclear.

What are the risks of misclassifying products under the Section 232 tariff framework?

Misclassification can lead to significant penalties, retroactive duty assessments, and enforcement actions, especially where errors involve patent status, country of origin, or eligibility for exemptions or reduced rates.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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