Market Watch: the pharmaceutical tariff now reaches every importer

What changed. On 29 September 2026 the 100 percent Section 232 tariff on imported patented pharmaceuticals and their active ingredients extended to all companies. Until then it applied only to those listed in Annex III of Proclamation 11020, who were captured on 31 July.^{1 2}

Six days earlier, Commerce published the architecture that determines who pays nothing.² That notice is the more useful document, and it did not exist in August.

Eight specialty categories are zero-rated: orphan-only drugs, nuclear medicines, plasma-derived therapies, fertility drugs, cell and gene therapies, antibody drug conjugates, CBRN medical countermeasures, and animal health products.²

The zero rate applies where the product originates in an eligible jurisdiction, of which there are now nineteen: Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, India, Indonesia, Japan, Jordan, Malaysia, North Macedonia, the Republic of Korea, Switzerland and Liechtenstein, Taiwan, Thailand, the United Kingdom and Vietnam. Commerce states the list may change in a future notice.²

Be careful what that list is. It is not a general rate reduction and it is not a second UK-style carve-out. It gates the eight specialty categories only. Conflating the two is the easiest mistake available here, and an expensive one.

There is now a zero rate for trial material. New HTSUS heading 9903.04.70 at 0 percent covers pharmaceutical articles used only in clinical trials, research and development, or other non-commercial applications.² For anyone running US trial supply, that is a direct line item.

Commerce also removed five codes from Annex IV, and opened an urgent health need route for products outside the eligible jurisdictions, with applications to a dedicated Commerce address, one product per application, decided in consultation with USTR and HHS and administered by Customs at entry summary filing.²

The rest of the structure is unchanged. 100 percent base rate. 20 percent with an approved onshoring plan, rising to 100 percent on 2 April 2030. 15 percent for Japan, the EU, South Korea, and Switzerland with Liechtenstein. Zero for the UK since 31 July. Zero until 20 January 2029 for companies holding a most-favored-nation pricing agreement with the US health department. Generics and biosimilars remain outside the measure.^{1 3}

What to do now. Three things, in order.

Map every US-bound presentation against the eight specialty categories and the nineteen jurisdictions. A product that qualifies on both axes pays nothing, and that is now a documentation exercise rather than a negotiation.

Separate your trial supply from your commercial supply in customs terms, and claim 9903.04.70 where it applies. It is new and it is easy to miss.

Then, for anything that qualifies on neither, decide whether the urgent health need route is worth filing. It is open on an ongoing basis and decided product by product, which means it is slow and specific rather than strategic.

One thing worth saying plainly. Orphan designation, biosimilar status and country of manufacture are now tariff positions. They were regulatory and operational decisions eighteen months ago. Whoever owns your portfolio sequencing probably does not have a customs model, and now needs one.