The U.S. Commerce Department has finalized rules allowing certain specialty pharmaceutical products and their ingredients to enter the country at a zero percent tariff rate, providing exemptions from the administration’s new 100% duties on specified imported patented medicines.
The rules, published in the Federal Register, define the types of specialty medicines eligible for the tariff treatment and identify jurisdictions whose qualifying products can receive the exemption. The framework takes effect as the broader pharmaceutical tariffs begin applying to additional companies on Sept. 29.
- Certain specialty pharmaceuticals and associated ingredients can qualify for a 0% U.S. tariff.
- Eligible categories include orphan drugs, nuclear medicines, plasma-derived therapies, fertility treatments, cell and gene therapies and antibody-drug conjugates.
- Certain medical countermeasures and animal-health products are also covered.
- Products must meet additional conditions relating to their country of origin or an urgent U.S. health need.
- Companies can submit information seeking a determination that their products meet the urgent-health-need criteria.
- Generic pharmaceuticals and their ingredients are currently outside the Section 232 tariff regime.
New Rules Define Which Drugs Qualify
The Commerce Department’s notice implements provisions of Presidential Proclamation 11020, issued in April, which established a framework for tariffs on imported pharmaceuticals and pharmaceutical ingredients.
Under the new guidance, a zero tariff can apply to drugs whose approved indications are all designated as orphan indications, as well as several categories of specialty medicines.
These include nuclear medicines, plasma-derived therapies, fertility drugs, cell therapy products, gene therapy products and antibody-drug conjugates (ADCs). Certain medical countermeasures addressing chemical, biological, radiological and nuclear threats and animal-health products are also included.
The exemption applies to associated pharmaceutical ingredients as well as qualifying finished medicines.
Country of Origin Is a Key Requirement
The zero-tariff treatment is not automatically available to every specialty medicine produced anywhere in the world.
The Commerce Department said qualifying products can receive the zero rate when they originate in a jurisdiction with a current or forthcoming trade and security framework agreement with the United States.
Products can also qualify if the Commerce Department, in consultation with the U.S. Trade Representative and the Department of Health and Human Services, determines that they meet an urgent U.S. health need.
This creates two pathways for specialty pharmaceutical imports to receive the tariff exemption.
Companies Can Seek an Urgent-Health-Need Determination
The new rules establish a process through which companies and other interested parties can provide information to Commerce supporting a determination that a pharmaceutical product meets an urgent U.S. health need.
The department said submissions can include information relevant to the product’s role in addressing a health need and the potential consequences for U.S. patients if the product were subject to the applicable tariff.
Commerce will then determine whether the product qualifies for the zero tariff under the urgent-health-need provision.
The process gives the government a mechanism to exempt additional specialty medicines beyond those automatically covered by the categories listed in the regulation.
100% Tariffs Apply to Certain Patented Medicines
The exemptions come as the U.S. moves forward with a 100% ad valorem tariff on certain imported patented pharmaceutical products and associated ingredients.
The tariff was established under Section 232 of the Trade Expansion Act. It initially took effect July 31 for companies identified in an annex to the presidential proclamation, while the broader group of affected companies becomes subject to the tariff beginning Sept. 29.
The policy is intended to encourage pharmaceutical companies to increase manufacturing capacity in the United States.
The administration has also created separate mechanisms through which companies can obtain different tariff treatment by entering into approved onshoring agreements.
Generic Drugs Remain Outside the Tariff Regime
Generic medicines have been treated differently under the current policy.
The Commerce Department’s notice confirms that Section 232 pharmaceutical tariffs do not currently apply to generic pharmaceutical products and their associated ingredients.
The original presidential proclamation also directed the Commerce Department to monitor generic pharmaceutical imports and report within one year on circumstances that could warrant additional action.
As a result, the current tariff structure primarily affects certain patented and specialty pharmaceutical imports rather than the broader generic-drug market.
Specialty Categories Cover Complex Therapies
Several of the categories eligible for the zero tariff involve products that can have complex manufacturing and supply chains.
Cell and gene therapies, for example, often rely on specialized manufacturing infrastructure and highly controlled processes. Plasma-derived medicines and ADCs similarly depend on specialized inputs and production capabilities.
By including these categories in the zero-tariff framework, the administration has created an exemption structure that recognizes the specialized nature of some pharmaceutical supply chains while maintaining pressure on other imported medicines.
The Federal Register notice specifically identifies each category covered by the exemption.
India Among the Eligible Jurisdictions
India is among the jurisdictions whose qualifying specialty pharmaceutical products can receive the zero-tariff treatment. Other eligible jurisdictions include the European Union, Japan, the United Kingdom and South Korea, among others.
The development is significant for Indian pharmaceutical manufacturers because the U.S. is a major export market for the country’s drug industry.
However, the exemption does not cover all medicines manufactured by Indian companies. Products must fall within the specified specialty categories and satisfy the applicable requirements.
Impact on Pharmaceutical Supply Chains
The tariff framework adds another variable for drugmakers deciding where to manufacture medicines and pharmaceutical ingredients.
Companies with affected products face potential costs from the 100% tariff unless their medicines qualify for an exemption, receive alternative tariff treatment through an agreement or otherwise fall outside the scope of the measure.
The zero-tariff rules could therefore provide greater certainty for manufacturers of specialty medicines that meet the eligibility criteria, while companies producing other patented medicines may face stronger incentives to evaluate U.S. manufacturing options.
The administration’s broader policy includes onshoring agreements that can provide tariff adjustments for companies committing to expand domestic production.
Rules Take Effect as Broader Tariffs Expand
The new Commerce Department guidance arrives as the broader pharmaceutical tariff regime reaches another implementation date.
For companies not included in the first group subject to the Section 232 duties, the 100% tariff takes effect for qualifying imports entering the United States from Sept. 29, 2026.
The specialty-drug exemptions therefore become an important part of the U.S. trade framework for pharmaceuticals as manufacturers assess the impact of the new duties.
For drugmakers, the key considerations will be whether individual products qualify for one of the designated specialty categories, whether their country of origin meets the applicable requirements and whether they can establish an urgent U.S. health need where necessary.
The United States has established zero-tariff treatment for certain specialty Medicines and associated pharmaceutical ingredients, creating exemptions from the broader Section 232 tariffs on selected imported pharmaceutical products. The rules were outlined by the U.S. Department of Commerce in a September 2026 notice.
The zero-tariff framework covers specific categories of products rather than providing a blanket exemption for all imported Medicines. Eligibility depends on the type of product and, in applicable cases, the country or jurisdiction where the product originates.
Which Medicines Qualify?
The eligible categories include Medicines where all approved indications are designated as orphan products, nuclear Medicines, plasma-derived therapies, fertility drugs, cell therapy products, gene therapy products and antibody-drug conjugates.
