The 100 percent tariff on imported patented drugs now covers every drugmaker that is not already on the White House’s first list, since September 29, when the order’s start date for “all other companies” arrived. The tariff was announced April 2 and first hit the companies named in an annex to the order on July 31. Companies that have signed most-favored-nation pricing agreements with the administration pay 0 percent instead, a break that runs through January 20, 2029. Generic drugs are excluded. What the tariff will do to prices at the pharmacy counter has not been published.
What changed on September 29
The tariff comes from a proclamation President Donald Trump signed on April 2, which set a 100 percent duty on imports of patented pharmaceuticals under Section 232, the trade law that allows tariffs on national security grounds. The order phased the duty in by company. Firms listed in Annex III of the order were covered starting July 31, 2026, and every other company was covered starting September 29, 2026.
Commerce’s Bureau of Industry and Security put the schedule into practice on September 23, when it published guidance and procedures for the tariff in the Federal Register. The notice repeats both dates and the 100 percent rate. It also says the tariff does not apply to generic drugs “at this time,” which leaves generics outside the new duty, at least for now.
Brand-name prescriptions are where the question lands for people on fixed incomes, including the Medicare Part D members who buy them. Neither the proclamation nor the Commerce notice estimates what the tariff will do to list prices, insurer costs or copayments, and no agency has said when any change would reach a pharmacy. What exists today is a set of programs that cut drug costs for people with limited income, and each of them requires an application.
Whether the tariff reaches pharmacy prices is still unanswered, but the help programs for drug costs already exist and have to be applied for. The Benefits Checklist is a paid 69-page guide that covers 11 benefit programs, with the 2026 income limits and a 50-state phone directory, so the drug-cost programs can be lined up before any price change arrives.
See the drug-cost help programs in the Benefits Checklist →
The 0 percent rate for pricing agreements
The order sets 100 percent as the base rate and then carves out lower ones. Companies with a most-favored-nation pricing agreement, meaning a drug-pricing deal struck with the administration, pay 0 percent until January 20, 2029. The date marks the end of the current presidential term, so the exemption is tied to those agreements holding until then. The proclamation does not list which companies have qualified.
The White House has described how far the agreements reach. A fact sheet dated September 18 says 26 manufacturers, including Pfizer, Eli Lilly, Merck, AbbVie, Novartis and Johnson & Johnson, have signed agreements covering 89 percent of the branded drug market. Under that deal, all 50 state Medicaid programs get rebates that keep their brand-name drug prices at or below the most-favored-nation level. The White House puts the savings at $64.3 billion over ten years.
The rebates are for Medicaid, the program for low-income people, and the tariff exemption is for imports. The fact sheet says nothing about retail or Medicare prices. Medicare Part D plans are not part of that announcement, so the 0 percent rate and the Medicaid savings both sit outside what most Medicare households pay at the pharmacy.
Other lower rates and exempt drug categories
Several other rates sit between 0 and 100 percent. Firms with approved plans to build manufacturing in the United States pay 20 percent, and that rate rises to 100 percent four years after the proclamation date. Products from the European Union, Japan, South Korea, Switzerland and Liechtenstein face 15 percent, and products from the United Kingdom face 10 percent, a rate that falls to zero if a new trade agreement with Britain is concluded.
The Commerce notice adds a list of products that receive a 0 percent rate: orphan drugs for rare diseases, nuclear medicines, plasma-derived therapies, fertility drugs, cell and gene therapies, antibody drug conjugates, medical countermeasures for chemical, biological, radiological and nuclear threats, and animal health products. The notice names 20 jurisdictions with trade and security framework agreements, including India, Taiwan, Thailand and Vietnam, and says companies can request an urgent-health-need approval on a rolling basis starting September 23.
The result is a tariff with a 100 percent headline rate and several ways to avoid it. A drugmaker with no pricing deal, no onshoring plan and a product made outside the listed jurisdictions pays the full rate on a patented import. A drugmaker in any of those groups pays less or nothing, which makes the number of companies holding pricing agreements the figure that decides how far the 100 percent rate reaches.
Lowering Medicare drug costs through programs that already exist
The most direct help with brand-name drug costs for Medicare members is Extra Help, the Part D low-income subsidy run by Social Security. Social Security’s Extra Help page explains the program and takes applications online or at 1-800-772-1213. Medicare lists the 2026 limits: income up to $23,940 for one person or $32,460 for a married couple, and resources up to $18,090 or $36,100.
People who receive full Medicaid, help from a Medicare Savings Program with Part B premiums, or Supplemental Security Income qualify for Extra Help automatically, according to Medicare’s drug-cost help page. That page also points to State Pharmaceutical Assistance Programs, which vary by state, and to State Health Insurance Assistance Programs, which offer free counseling. Medicare’s number is 1-800-633-4227.
The tariff’s effect on those costs is the open piece. Extra Help lowers a member’s Part D costs, while members outside it would carry any increase the tariff passes through. The 0 percent rate for agreement companies ends January 20, 2029, so the question that remains is whether the 26 manufacturers’ agreements, which the White House says cover 89 percent of the branded market, hold until then.
The Benefits Checklist, a paid guide, sets out Extra Help and state drug-cost help alongside its other benefit programs. It includes the 2026 income limits for each of the 11 programs and a printable tracker that comes with the download, to keep applications in order.
Click here to get The Benefits Checklist for Medicare drug-cost help →
This article was produced with AI assistance and reviewed by The Money Overview’s editorial team.
