Trump’s pharma war escalates: Tariffs coming for cheap foreign drugs
If implemented, the investigation could prompt tariffs or other trade actions against nations that negotiate lower drug prices—most of the developed world—escalating tensions across global pharmaceutical markets.
- Oct 23, 2025,
- Updated Oct 23, 2025 6:39 AM IST
US President Donald Trump is preparing to launch a sweeping investigation into foreign drug pricing practices, setting the stage for potential tariffs as he seeks to pressure other countries to pay as much as Americans do for pharmaceuticals, Bloomberg reported Wednesday.
According to Bloomberg, the probe would be initiated under Section 301 of the Trade Act of 1974—a powerful mechanism Trump has used before to impose tariffs on foreign entities deemed unfair to U.S. businesses.
The White House declined to comment, and discussions remain private.
If implemented, the investigation could prompt tariffs or other trade actions against nations that negotiate lower drug prices—most of the developed world—escalating tensions across global pharmaceutical markets. Trump has long slammed the current pricing dynamic as “global freeloading on American pharmaceutical innovation.”
The goal: force foreign governments to align their drug prices with U.S. levels. “It could be a marginal positive” for American pharmaceutical firms, said Leerink Partners analyst David Risinger, though he cautioned that the administration’s ability to influence ex-U.S. prices remains uncertain.
The move follows months of tariff threats. In September, Trump proposed a 100% tariff on branded drugs unless companies moved production back to the U.S.—a proposal he later shelved to allow more time for compliance.
In May, Trump signed an executive order calling on drugmakers to match the lowest prices paid by peer nations. He also issued letters to 17 firms over the summer demanding they lower Medicare prices within 60 days.
Though Section 301 actions typically target foreign governments, Trump’s trade office has used them before for multinational issues—most notably on digital service taxes affecting U.S. tech companies.
Pharma firms appear open to the approach. AbbVie CEO Robert Michael told investors in September, “We do need partnership with the administration… Section 301 [is] certainly something that can be employed to address these unfair practices.”
India impact
India, a major supplier of low-cost generic drugs to the U.S. and other developed markets, could face significant fallout. Indian pharmaceutical giants like Sun Pharma, Dr. Reddy’s, and Cipla—heavily reliant on U.S. exports—could see increased costs, market access hurdles, and tighter regulatory scrutiny.
US President Donald Trump is preparing to launch a sweeping investigation into foreign drug pricing practices, setting the stage for potential tariffs as he seeks to pressure other countries to pay as much as Americans do for pharmaceuticals, Bloomberg reported Wednesday.
According to Bloomberg, the probe would be initiated under Section 301 of the Trade Act of 1974—a powerful mechanism Trump has used before to impose tariffs on foreign entities deemed unfair to U.S. businesses.
The White House declined to comment, and discussions remain private.
If implemented, the investigation could prompt tariffs or other trade actions against nations that negotiate lower drug prices—most of the developed world—escalating tensions across global pharmaceutical markets. Trump has long slammed the current pricing dynamic as “global freeloading on American pharmaceutical innovation.”
The goal: force foreign governments to align their drug prices with U.S. levels. “It could be a marginal positive” for American pharmaceutical firms, said Leerink Partners analyst David Risinger, though he cautioned that the administration’s ability to influence ex-U.S. prices remains uncertain.
The move follows months of tariff threats. In September, Trump proposed a 100% tariff on branded drugs unless companies moved production back to the U.S.—a proposal he later shelved to allow more time for compliance.
In May, Trump signed an executive order calling on drugmakers to match the lowest prices paid by peer nations. He also issued letters to 17 firms over the summer demanding they lower Medicare prices within 60 days.
Though Section 301 actions typically target foreign governments, Trump’s trade office has used them before for multinational issues—most notably on digital service taxes affecting U.S. tech companies.
Pharma firms appear open to the approach. AbbVie CEO Robert Michael told investors in September, “We do need partnership with the administration… Section 301 [is] certainly something that can be employed to address these unfair practices.”
India impact
India, a major supplier of low-cost generic drugs to the U.S. and other developed markets, could face significant fallout. Indian pharmaceutical giants like Sun Pharma, Dr. Reddy’s, and Cipla—heavily reliant on U.S. exports—could see increased costs, market access hurdles, and tighter regulatory scrutiny.