Trump Executive Order Sets Tariffs on Patented Drug Imports

Recent U.S. trade policy has introduced new tariffs on patented pharmaceutical imports, affecting global pharmaceutical production and international trade relationships.

On April 2, 2026, President Trump signed an executive order that applies tariffs of up to 100% on certain patented drugs imported into the United States. The order states that companies can avoid these tariffs by negotiating “most favored nation” pricing agreements and establishing manufacturing operations within the U.S.

According to the executive order, companies that secure both a pricing deal and U.S.-based production will face no tariffs. Those that begin building domestic facilities without a pricing agreement will see tariffs starting at 20%, which can rise to 100% over a four-year period if requirements are not met.

Global pharmaceutical production rose by 9.1% in 2025, a trend attributed to companies accelerating output in advance of the U.S. tariff measures. The UK and EU saw their pharmaceutical output grow by 21.6% during this period, while Ireland recorded a 41.3% increase, with both regions responding to anticipated changes in U.S. trade policy.

What the numbers show

• Global pharmaceutical production increased 9.1% in 2025
• Pharmaceutical output in the UK and EU rose 21.6% in 2025; Ireland’s output surged 41.3%
• In 2023, the U.S. imported $170 billion in pharmaceuticals, becoming the world’s largest importer
• Pharmaceuticals were the EU’s top export to the U.S. in 2024, valued at $127 billion
• The U.S. sources about 80% of its active pharmaceutical ingredients from China, India, and the EU

Forecasts for 2026 indicate a slowdown in pharmaceutical output, with global growth expected to drop to 1.6%. The UK and EU are projected to see a 3.7% decrease in output, while Ireland is expected to experience a 6.4% decline, according to Atradius.

The U.S. has become the world’s largest importer of pharmaceuticals, with $170 billion in imports recorded in 2023. In 2024, the EU’s leading export to the U.S. was pharmaceuticals, valued at $127 billion. Ireland and Belgium also play major roles in supplying the U.S. market, with Ireland exporting over €80 billion in pharmaceuticals to the U.S. in 2023 and Belgium sending more than $73 billion in the first ten months of 2024, a quarter of which was destined for the U.S.

Approximately 80% of the active pharmaceutical ingredients used in the U.S. are sourced from China, India, and the EU. This reliance on international suppliers highlights the global nature of pharmaceutical supply chains and the potential impact of new U.S. trade measures.

Industry reaction

The European Federation of Pharmaceutical Industries and Associations (EFPIA) stated in 2025 that over €16.5 billion in biopharma investments within the EU could be at risk within three months due to the threat of U.S. tariffs. EFPIA also stated that more than €100 billion in pharmaceutical investment could move from Europe to the U.S. if policy changes are not made.

EFPIA stated that, without rapid and substantial policy adjustments, pharmaceutical research, development, and manufacturing activities are increasingly likely to be directed toward the U.S. market.

* This article is based on publicly available information at the time of writing.