US tariffs: How will the latest changes impact drug discovery? 

Trump’s global tariffs have been ruled illegal by the Supreme Court – but what, if any, effect will the judgment have on pharmaceutical imports? Diana Turner summarises the current situation. 

The saga of global tariffs continues in the US, bringing confusion to international markets. Following a Supreme Court ruling that nullified Donald Trump’s previous import taxes, the President responded that he would replace the tariffs with a 10% levy on all goods coming into the US. He then threatened an increase to 15%, apparently the maximum allowed under a never-used trade law, which can be applied for five months before the administration must seek Congress’s approval. A White House statement states: “The Supreme Court’s disappointing decision today will not deter the President’s effort to reshape the long-distorted global trading system that has undermined the economic and national security of our country, and contributed to fundamental international payment problems.”  

In response, more than 1,400 companies filed lawsuits against the administration demanding refunds for the duties paid under the ‘illegal’ tariffs. The European Parliament decided to postpone a vote on the European Union’s trade deal with the US due to the latest upheaval. 

In terms of tariffs specifically targeting the pharmaceutical industry, the situation is similarly unsettled, though it is likely they will be unaffected by the Supreme Court decision. Even if these new 10% tariffs are also ruled illegal, Trump is still able to apply duties to pharmaceutical imports as the ruling does not apply to sector-specific tariffs. Pharma tariffs were imposed under Section 232 of the Trade Expansion Act, rather than the International Emergency Economic Powers Act (IEEPA), which was the justification for international tariffs.

What’s happened so far?

In August 2025, the US government announced a 15% tariff on branded pharmaceutical products imported from the EU, disrupting a long-established practice of the exemption of medicines from tariffs. Separate to this, the Trump Administration announced a 39% tariff rate on imports from Switzerland, which was reduced to 15% in a 2026 agreement. Meanwhile, a UK-US drugs deal guaranteed a 0% rate for UK imports. 

US President Donald Trump also sent letters to the leaders of 17 major pharmaceutical companies outlining how they should slash US prescription drug prices to match those paid overseas. He called on drugmakers to provide so-called “most-favoured-nation prices” to every patient enrolled in the government Medicaid health programme for low-income people, and to guarantee such pricing for new drugs. 

Spooked by the threat of tariffs as high as 250%, individual pharma groups secured deals that promised temporary exemptions in return for capital investment programmes in the US and Most-Favoured Nation (MFN) pricing deals for some products on the TrumpRx platform. 

One of these was AstraZeneca, which agreed to provide Direct-to-Consumer (DTC) sales to eligible patients with prescriptions for chronic diseases at a discount of up to 80% off list prices on the TrumpRx.gov direct purchasing platform. The company also reached an agreement to delay Section 232 tariffs for three years to fully onshore medicines manufacturing through a $50 billion investment in US medicines manufacturing and R&D over the next five years. Pfizer was another company than signed a deal to guarantee a three-year grace period from tariffs, provided it further invested in manufacturing in the US. Despite initial resistance from obesity drug manufacturers, Novo Nordisk was the latest to announce a significant reduction in the US list price for its semaglutide brands Wegovy (50%) and Ozempic (35%) in February 2026. 

In September 2025, in further efforts to ensure domestic investment, the FDA prohibited new clinical trials that send US patients’ live cells overseas, including to China, for gene editing and return infusion, having a significant impact on cell and gene therapy companies. The FDA said the action followed “mounting evidence” that some clinical trials failed to inform participants about the international transfer and manipulation of their biological material. FDA Commissioner Dr Marty Makary, says: “The integrity of our biomedical research enterprise is paramount. We are taking action to protect patients, restore public trust, and safeguard US biomedical leadership.”  

The ruling is part of a broader national effort to implement Executive Orders 14117 and 14292, which direct the federal government to prevent the exploitation of sensitive biological data by foreign adversaries and ensure research funding flows only to secure, transparent, and US-compliant institutions.

Tariffs and the drug discovery sector

So, what impact will the latest announcements have on the drug discovery sector? The answer to that question remains unclear. It is likely that the 15% tariff on pharmaceuticals will remain in place, though this policy has already had a substantial effect on the industry. 

As discussed, the tariffs have caused the industry to pivot towards domestic manufacturing, with significant investment in US manufacturing plants, accelerating global trade tensions. For example, Biogen committed an additional $2 billion to develop its existing manufacturing footprint in North Carolina’s Research Triangle Park (RTP), and Roche announced that it will invest $50 billion into the US in the next five years. However, this unfairly discriminates against smaller biotech companies who are unable to make these expensive commitments. It has also been suggested that large tariffs have led to a squeeze on R&D budgets. 

In a reaction to these threats, a group of midsized biopharmaceutical companies formed the Midsized Biotech Alliance of America (MBAA) to represent this vulnerable segment of the US life sciences ecosystem. “Midsized biotechs are the heart of American innovation, taking bold scientific risks, creating high-wage US jobs, and bringing life-changing treatments to patients,” comments Alanna Temme, MBAA Spokesperson “But these companies operate at a critical stage of growth where the wrong policy decisions could halt progress in its tracks. MBAA was created to ensure that policymakers understand what’s at stake and to advocate for solutions that sustain both affordability and innovation.” 

In a GlobalData survey assessing anticipated regulatory and macroeconomic impacts over the next 12 months (on a scale of -5 to 5), actions of the Trump administration and trade wars and tariffs ranked as the most negative factors, cited by 36% of respondents. These were followed by P&R constraints in third, and respondents also cited the Inflation Reduction Act (IRA) in the US; the Most Favored Nation (MFN) policy in the US; and International Referencing Pricing (IRP). 

The MFN policy could have a significant impact on global pricing for drugs. Milena Izmirlieva, Senior Director and Head of Health Economics and Market Access Research and Analysis at GlobalData, comments: “The negative impact of the US MFN plans, if implemented as currently envisaged, will have negative repercussions around the world and would not necessarily result in savings for US patients.” 

She adds: “This will result in a double jeopardy situation for pharma: if other countries reference lower US MFP prices under IRP, and the US subsequently references those same countries under MFN/IRP frameworks, it could trigger a global race to the bottom on drug prices. While current patients may benefit from lower prices, pharmaceutical revenues, the industry’s capacity to invest in drug development would be significantly undermined, ultimately reducing the number of new treatments reaching the market.” 

With a constantly changing picture and Trump still threatening to impose additional tariffs under Section 232, uncertainty remains for the industry as a whole – keep an eye on www.ddw-online.com for the latest updates. 

From DDW Volume 27 – Issue 2, Spring 2026 – Read the digital issue here

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