President Trump announced a sweeping new tariff plan for imported generic drugs.
The plan, posted on Truth Social, calls for a 100% tariff on imported generics starting August 1, 2028. The rate would jump to 200% one year later.
The goal is to pressure pharmaceutical companies to build manufacturing plants on American soil.
Generic drugs account for the vast majority of US prescriptions. The primary supplying countries, including India, China, and Switzerland, are now on a two-year countdown.
A grace period begins August 1, 2026, with zero tariffs to allow manufacturers time to begin reshoring operations. That window closes on July 31, 2028.
After that, the tariffs are steep. A 100% duty would double the cost of an imported generic drug. A 200% duty would triple it.
Patented drugs are not included. The policy targets the generics market specifically.
Previous trade agreements had capped pharmaceutical tariffs at a maximum of 15%. This plan shatters that ceiling.
The announcement immediately impacted pharmaceutical stocks. Companies reliant on imported generics saw pressure, while US-based manufacturers with existing domestic capacity gained a tailwind.
The move is part of a broader industrial policy to bring critical manufacturing back to the US. In the short term, it could significantly impact consumers, as generic drugs are cheap due to lower overseas production costs.