Pharmaceutical companies without a Most Favored Nation pricing deal were expected to begin paying a 100% tariff on their patented drug imports on September 29, when Section 232 duties took effect for every drugmaker not already covered under Annex III of Presidential Proclamation 11020.^1,3

However, newly published Commerce Department guidance has now opened a narrow lane for specialty products, including orphan drugs, nuclear medicines, cell and gene therapies, and antibody drug conjugates, to keep entering the country duty-free.

The guidance, issued by the Bureau of Industry and Security after consultation with FDA and the U.S. Department of Agriculture's Center for Veterinary Biologics, defines exactly which pharmaceutical products qualify for the zero-percent tariff rate carved out in Proclamation 11020, and which countries' exports are eligible for it.¹ The guidance also finalizes procedures companies can use to apply for individual tariff relief on the grounds of "urgent U.S. health need," and lays out how manufacturers can instead pursue company-specific onshoring agreements with Commerce.^1,3

Which products qualify for the zero-tariff rate?

Eight categories of specialty products, plus a separate carve-out for animal health, are eligible for the zero ad valorem rate.¹

• Orphan drugs: Drugs and biological products for which all approved or licensed indications are designated as orphan under the Orphan Drug Act. A drug approved for both an orphan and a non-orphan use does not qualify.¹

• Nuclear medicines: Drugs and biological products defined by FDA's existing regulatory definitions of radioactive drugs and radioactive biological products.
• Plasma-derived therapies: Biological products derived from human whole blood or plasma.
• Fertility drugs: Products for treating infertility, including treatments for ovulatory dysfunction in women trying to conceive.
• Cell therapy products: Cellular immunotherapies, cellular cancer vaccines, and other autologous or allogeneic cellular products, including hematopoietic stem cell and adult and embryonic stem cell products.
• Gene therapy products: Biological products intended to modify or manipulate gene expression, or to alter the biological properties of living cells, for therapeutic use.
• Antibody drug conjugates: A small-molecule drug payload conjugated to an antibody or antibody fragment through a chemical linker.
• Medical countermeasures: Drugs and biological products used to diagnose, prevent, or treat diseases caused by chemical, biological, radiological, or nuclear threats.

Animal healthcare products round out the list, covering veterinary pharmaceuticals and biologics regulated by the Department of Agriculture's Center for Veterinary Biologics.¹

Which countries are exempt?

Even within those product categories, the zero rate only applies automatically to imports from 19 named jurisdictions: Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, India, Indonesia, Japan, Jordan, Malaysia, North Macedonia, the Republic of Korea, Switzerland and Liechtenstein, Taiwan, Thailand, the United Kingdom, and Vietnam.¹

Products from outside those jurisdictions are still able to qualify if a company successfully petitions to show its import meets an urgent U.S. health need.¹ Applications, submitted by email to Commerce's Section 232 pharmaceuticals inbox, must identify the product's Harmonized Tariff Schedule classification, its manufacturer and importer of record, and a rationale that can include the type of disease it treats, an assessment of alternative therapies, how many U.S. patients rely on it, and whether it is available in other jurisdictions.¹

What if a company doesn't qualify for either exemption?

Manufacturers whose products fall outside the specialty categories, or the 19 eligible jurisdictions have one more avenue to receive exemption, a company-specific onshoring agreement.¹ Under procedures finalized in May, a company that commits to onshoring U.S. manufacturing can qualify for a reduced 20% tariff rate, and a company that pairs that onshoring commitment with a Most Favored Nation pricing agreement with the Department of Health and Human Services can bring its rate down to zero through January 20, 2029.^1,2,3

Sources

1. Guidance and Procedures for Implementing Tariff Adjustments for Specialty Pharmaceuticals and Associated Pharmaceutical Ingredients and Technical Corrections to the Harmonized Tariff Schedule of the United States for Duties Imposed Under Proclamation 11020 Federal Register September 23, 2026, https://www.federalregister.gov/documents/2026/09/23/2026-19498/guidance-and-procedures-for-implementing-tariff-adjustments-for-specialty-pharmaceuticals-and
2. Fact Sheet: President Donald J. Trump Bolsters National Security and Strengthens U.S. Supply Chains by Imposing Tariffs on Patented Pharmaceutical Products The White House April 2, 2026, https://www.whitehouse.gov/fact-sheets/2026/04/fact-sheet-president-donald-j-trump-bolsters-national-security-and-strengthens-u-s-supply-chains-by-imposing-tariffs-on-patented-pharmaceutical-products/
3. Procedures To Apply for Company-Specific Onshoring Agreements to Obtain Tariff Adjustments for Pharmaceuticals and Pharmaceutical Ingredients Under Proclamation Department of Commerce April 2, 2026, https://public-inspection.federalregister.gov/2026-09489.pdf