US exempts certain speciality drug imports from 20 countries from tariffs

The United States has exempted certain speciality medicines and related ingredients imported from India and 19 other countries from ad valorem tariffs. The US Commerce Department published the list in the Federal Register as it prepares to impose a 100 per cent tariff on specified patented pharmaceutical imports and associated ingredients from September 29. Eligible products receiving a zero per cent rate include medicines for rare diseases and infertility, cell and gene therapies, antibody-drug conjugates and animal pharmaceuticals.

Components of those medicines are also covered. The other jurisdictions listed are Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, Indonesia, Japan, Jordan, Malaysia, North Macedonia, South Korea, Switzerland, Liechtenstein, Taiwan, Thailand, Britain and Vietnam. The notice said qualifying products could receive the exemption because the jurisdictions have a current or forthcoming trade and security framework agreement with the United States.

The measure implements President Donald Trump’s April proclamation under Section 232 of the Trade Expansion Act. The proclamation sought to encourage domestic pharmaceutical production and imposed a 100 per cent tariff on specified patented pharmaceuticals and ingredients. It took effect on July 31 for companies listed in one annex and applies to additional covered companies from September 29.

Generic medicines and associated ingredients are not subject to the Section 232 pharmaceutical tariffs. The Commerce Department also clarified definitions covering generic pharmaceutical articles, unpatented animal-health products and finished pharmaceuticals, active ingredients and key starting materials.