A Section 232 proclamation on patented medicines sets a 100 percent import duty and a 20 percent rate for drugmakers whose onshoring plans the Commerce Secretary has approved, with that lower rate scheduled to end on April 2, 2030. The duty reached most remaining importers on September 29, two months after it began for the companies listed in Annex III. None of the White House or Commerce documents reviewed for this report names a drugmaker that holds an approved plan.
For a Medicare Part D enrollee who takes a brand-name drug, the duty is charged to the importer, so nothing appears as a line item at the pharmacy counter. Any effect would travel through insurer drug lists and premiums, a path the proclamation does not describe.
A 20 percent rate granted one company at a time
The April 2 proclamation sets a 100 percent ad valorem duty on imported patented pharmaceuticals and their active ingredients. It then provides that the rate “shall be 20 percent for products of companies that have” onshoring plans “approved by the Secretary,” adding that “the aforementioned 20 percent rate shall increase to 100 percent on April 2, 2030.” The Secretary of Commerce, in consultation with the Secretary of Health and Human Services, is to publish criteria for the plans and holds the power to approve, monitor and enforce them.
Those criteria arrived in a May 13 Federal Register notice. Applicants were to email the Bureau of Industry and Security by June 12, 2026, describing the products they would move to the United States, the new plant investment beyond that commitment, and milestones running to January 20, 2029. They also agreed to semiannual audited progress reports. Commerce estimated about 450 respondents. A company that also reaches a most-favored-nation pricing agreement with HHS can pay a zero rate through January 20, 2029.
The step back to 100 percent in April 2030
The onshoring milestones end January 20, 2029, but the discount lasts about fourteen months longer, until April 2, 2030. After that date a company with an approved plan pays the same 100 percent as a company without one, unless the proclamation is changed first. The timing means a drugmaker that cuts its duty bill now by pledging U.S. production faces the full rate early in the next presidential term.
Other rates in the proclamation do not depend on a plan. Products from the European Union, Japan, South Korea and Switzerland and Liechtenstein carry 15 percent, and products from the United Kingdom carry 10 percent. A product of U.S. origin is not subject to the duty.
What the September 29 start did and did not settle
A September 23 Federal Register notice from the Bureau of Industry and Security implements the action and lists Stephen Astle, Director of the Defense Industrial Base Division, as its agency contact. It confirms that the duty takes effect September 29 for most companies and July 31 for Annex III companies. It states that “different rates apply to patented pharmaceutical products and associated ingredients from certain jurisdictions and from companies with Commerce-approved onshoring agreements.” Generic drugs and their ingredients are excluded, as are orphan drugs, nuclear medicines, plasma-derived therapies, fertility drugs and cell and gene therapies.
The notice does not say which companies have won the 20 percent rate. A Baker McKenzie summary of customs guidance issued July 30 quoted the agency saying that “no companies currently qualify for the reduced 20% tariff rate.” That was two months before the wider start, and no later official roster has been published in the documents reviewed here. The reduced rate is therefore a mechanism on paper that individual companies must still obtain, not a rate every manufacturer pays.
Where a Part D enrollee would see it, if at all
Because generics are excluded, the exposure sits with patented products, the brand-name and specialty drugs. The proclamation sets a duty on the importer and does not address insurer pricing, so the first place a change could appear is a plan’s formulary. Medicare.gov explains that a plan’s list of covered drugs is called a formulary, and each plan has its own, which means two enrollees on the same drug can see different treatment depending on the plan.
The timing is fixed by Medicare, not by the tariff. According to Medicare.gov, Open Enrollment runs October 15 to December 7, with coverage starting January 1 as long as the plan receives the request by December 7. Commerce’s own May notice, which promised “an individual, fact-specific, company-specific decision for each applicant” and set no time limit on those decisions, is the record that the number of companies paying 20 percent instead of 100 can change at any point before the April 2, 2030 step back.
A kit for tracking Part D costs when brand-name drugs change
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This article was drafted with AI assistance from the cited official sources and checked against them before publication.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
