Following the reveal of President Donald Trump’s closely watched plan for branded pharmaceutical tariffs last week, several unknowns remained. Now, it appears the government is pushing pause on the plan until its drug pricing and infrastructure spending negotiations with the industry can play out.
A White House official has indicated to Stat that the administration's 100% tariffs on branded pharmaceuticals, announced by Trump last week and originally expected to be in place Oct. 1, have yet to be introduced.
Instead, the White House official pointed to comments made by Commerce Secretary Howard Lutnick at a Tuesday ceremony, according to Stat. Yesterday, Lutnick and others in the administration gathered in the Oval Office to celebrate a drug pricing deal reached by the Trump administration and Pfizer, plus a $70 billion U.S. spending pledge by the pharmaceutical giant.
At the Tuesday ceremony, Lutnick said the government would let the ongoing talks "play out" as officials continue to consider pharmaceutical tariffs.
That marked a turn from the Trump announcement from last week, which was not equivocal about the timing of tariffs. Sept. 25, Trump took to Truth Social to state that starting Oct. 1, the government would be "imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America."
“‘IS BUILDING’ will be defined as, ‘breaking ground’ and/or ‘under construction,’” Trump continued. “There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started.”
After the Truth Social post, it wasn't clear whether simply announcing a new U.S. site would suffice for a tariff exemption or whether operating an existing U.S. site would exempt a company.
Since then, the Trump administration has sought to put the spotlight on its drug pricing deal with Pfizer, even though the deal does little to move the needle on drug prices for most Americans. Nonetheless, Pfizer was able to secure a three-year tariff exemption by striking its pricing and investment deal with the government, the company said in its announcement.
Now, the administration expects other pharma giants to visit the White House and offer concessions, according to Stat's report. If they don't, the threat of tariffs remains.
The Pfizer pricing deal came together after Trump wrote letters to the CEO of the New York pharma giant and other industry heavyweights this summer commanding them to commit to bringing U.S. drug prices in line with lower prices offered in other developed nations. Specifically, the letters called on the companies to offer "most favored nation" prices to “every single Medicaid patient” and pledge not to provide “better prices” for drugs in other comparator countries than those offered in the U.S.