U.S. tariffs of up to 100% on patented drugs begin for Eli Lilly and 16 other companies

Section 232 tariffs of up to 100 percent on imported patented pharmaceuticals took effect at 12:01 a.m. EDT on July 31, 2026, for the 17 drugmakers named in Annex III of the April 2 proclamation, a group that includes Eli Lilly ^[1]. Importers of patented drugs from all other companies have until September 29, 2026 ^[1].

The April 2 proclamation imposed a 100 percent ad valorem duty on patented pharmaceuticals listed in Annex I, along with their active pharmaceutical ingredients (APIs) and key starting materials — more than 130 tariff lines across HTS Chapters 29 and 30, filed under new Chapter 99 headings 9903.04.60 through .69 ^[1][2]. Coverage is limited to drugs tied to a valid U.S. patent and listed in the FDA's Orange Book or Purple Book ^[1]. The 17-company list reads like a pharmacy shelf: Pfizer, Johnson & Johnson, Merck, Eli Lilly, AbbVie, Amgen, AstraZeneca, Novartis, Sanofi and eight more ^[1].

Rates depend on the company and where the product is made. The default is 100 percent. Companies with an onshoring plan approved by the Commerce Secretary pay 20 percent, a rate that rises to 100 percent on April 2, 2030. Companies with an approved onshoring plan and a most-favored-nation (MFN) pricing agreement with Health and Human Services pay zero through January 20, 2029 ^[2]. Thirteen of the 17 companies in Annex III already had such agreements, listed in Annex II, when the proclamation was signed, so their day-one rate follows those deals rather than the 100 percent default ^[1][2]. Products of the European Union, Japan, South Korea, and Switzerland and Liechtenstein jointly pay 15 percent, and products of the United Kingdom pay 10 percent, with the possibility of dropping to zero under a future pricing agreement ^[2].

Generics and biosimilars were left out. The proclamation states that imports of generic pharmaceuticals and their ingredients, "including biosimilar products," will not be adjusted "at this time," and Commerce has one year to recommend whether to add them ^[1][2]. More than 400 tariff lines in Annex IV get a zero rate, including many antibiotics, vitamins and hormones ^[1]. The zero rate also covers drugs whose approved indications are all designated orphan, plus nuclear medicines, plasma-derived therapies, fertility treatments, cell and gene therapies, antibody-drug conjugates, certain medical countermeasures, and animal health products, subject to conditions the proclamation describes ^[2].

The White House says the tariff pressure has already pulled in about $400 billion in promised U.S. pharmaceutical manufacturing investment ^[1]. The proclamation cites import reliance as a national security concern: roughly 53 percent of patented pharmaceutical products distributed domestically are produced outside the country, and only 15 percent of patented APIs by volume are made in the United States for the U.S. market ^[2]. There is no in-transit exception, so the date that counts is the day goods clear customs, not the day they shipped ^[1].

Why it matters for patients

Drugs such as Ozempic, Wegovy and Rybelsus (semaglutide) and Mounjaro and Zepbound (tirzepatide) are patented, branded products — the category the tariffs target. Neither source states which annex lists semaglutide or tirzepatide products, or which company agreements cover them, so the rate that would apply to any specific GLP-1 product has not been reported.

The duty is paid by the importer of record, not by patients at the pharmacy counter. Neither source states whether these tariffs will change list prices, insurance premiums, or out-of-pocket costs for GLP-1 medications, and no such effect has been disclosed.

Generic and biosimilar versions of these drugs are currently outside the tariff, a position the proclamation says could change after Commerce's one-year review ^[1][2]. For now, the practical effect most visible to patients is uncertainty about supply and pricing while companies sort out which products fall under which annex and which agreements.

What happens next

September 29, 2026 is the effective date for importers outside Annex III ^[1]. The proclamation directs the Commerce and Health and Human Services secretaries to report progress on negotiations within 90 days of April 2, 2026 ^[2]. The 20 percent rate for companies with approved onshoring plans rises to 100 percent on April 2, 2030, and the zero rate tied to MFN pricing plus onshoring runs until January 20, 2029 ^[2]. Commerce has one year from the proclamation to recommend whether generics and biosimilars should be brought in ^[1].