Preparing for the July 31 Pharma Tariff Deadline

In April of this year, President Trump announced plans to impose 100% tariffs on branded pharmaceutical imports. At the time, he set a deadline of July 31, 2026, for major pharmaceutical companies to negotiate onshoring agreements (which would reduce the tariffs to 20%).

Also, companies that negotiated deals with the administration as part of the President’s MFN initiative would be exempt from these tariffs. Further complicating the issue, regions with previously negotiated tariff deals would also be exempt from 100% tariffs on pharma imports.

This move is part of the President’s plans to strengthen domestic manufacturing and reduce the United States’ reliance on imports.

Pharmaceutical Executive spoke with Ryan Last, a senior associate at Troutman Pepper Locke, about the situation pharmaceutical and biotech companies face with just one month remaining before the initial deadline hits. While previous deadlines have passed by, pharma companies still have time to prepare and make plans, while also bracing for the larger impact that these tariffs may have.

Pharmaceutical Executive: What should pharma and biotech companies be doing to prepare for the July 31^st deadline?
Ryan Last: If you're even considering an onshoring agreement, the time for conceptual discussions has passed. Obviously, the June deadline is now gone, but you need a concrete, data-backed proposal.

If you had done that, there are four steps these companies should have gone through; focusing on products that are clinically critical and heavily dependent on foreign resources and realistically assessing what's able to be onshored.

There is also getting regulatory, manufacturing, supply chain, financing, quality, and research groups and departments within your company to the table. Legal and compliance can't do this alone, it needs to be done from the top down; and explaining the current vulnerabilities and presenting concrete onshoring plans, potentially with partners.

So maybe the company itself isn't going to submit an onshoring proposal, but it's going to partner with a company in the US that is.

I think we can't tell what's going to happen because the tariffs haven't fully taken effect. So far, what we're seeing, based on calls I've had with multiple large organizations and clients, is that the industry is committing over $500 billion in US investment, which is more than what we expected when the Section 232 tariffs were announced.

We're seeing facilities starting construction, but in the end, shifting supply chains and building these facilities is not something that happens overnight.