Novo Nordisk and Eli Lilly hold tariff relief through 2029 under pricing deals, review finds

A review of trade filings and company statements found that drugmakers accounting for 89 percent of branded pharmaceuticals sold in the United States have most-favored-nation pricing agreements with the White House, and that nearly all of them also hold agreements exempting their imports from Section 232 tariffs through Jan. 20, 2029 ^[1]. That group includes Novo Nordisk, which makes the semaglutide medicines Ozempic, Wegovy and Rybelsus, and Eli Lilly, which makes the tirzepatide medicines Mounjaro and Zepbound ^[1].

International Trade Today reviewed company press releases and financial filings and contacted manufacturers directly. It found that of the 26 firms covered by most-favored-nation pricing agreements, at least all but five will avoid the tariffs through Jan. 20, 2029 ^[1]. The duties, if they applied, are 15 percent for imports from the European Union, Japan, South Korea or Switzerland; 10 percent for imports from the United Kingdom; and 100 percent for the rest of the world ^[1]. The administration proposed higher tariffs beginning July 31 for larger drug companies and Sept. 29 for smaller ones ^[1]. Because of the exemptions disclosed so far, "no medicines have yet been subject to Section 232 tariffs," the review said ^[1].

The White House said in April that branded pharmaceutical exports from 13 large companies would not face tariffs until 2029: AbbVie, Amgen, AstraZeneca Pharmaceuticals, Bristol Myers Squibb, Boehringer Ingelheim Pharmaceuticals, Eli Lilly, EMD Serono, Genentech, Gilead Sciences, Merck Sharp & Dohme, Novartis Pharmaceuticals, Novo Nordisk and Sanofi ^[1]. GlaxoSmithKline and ViiV Healthcare, Johnson & Johnson, Pfizer and Regeneron Pharmaceuticals were initially listed as having pricing deals but not onshoring deals; each later disclosed tariff relief. Pfizer said in a financial filing that its Section 232 rate will be zero through Jan. 20, 2029 ^[1].

On Aug. 31 the White House announced pricing agreements with nine mid-sized manufacturers ^[1]. Reuters reported that President Donald Trump announced deals at an Oval Office event with companies including Astellas, BeOne Medicines, CSL, BridgeBio, Sun Pharmaceutical and UCB, while Israel's Teva said in a press release it was still in discussions about a potential agreement ^[2]. CSL said Sept. 1 that it signed an onshoring agreement reflecting a $1.5 billion manufacturing expansion in Kankakee, Illinois, and Sun Pharma said its agreement delays Section 232 tariffs on innovative products for more than two years ^[1].

Public disclosures do not establish zero tariff treatment for four of the mid-sized companies: Alcon, Astellas Pharma, BridgeBio Pharma and Teva Pharmaceuticals ^[1]. Astellas said Sept. 1 that it reached an agreement covering drug pricing and supply-chain commitments but that additional terms were not being disclosed ^[1]. Teva said Aug. 31 that negotiations remain active, a framing that differs from the White House fact sheet describing Teva as one of nine manufacturers with newly announced agreements ^[1].

Why it matters for patients

The tariff regime that took effect July 31 for companies without agreements has so far bypassed the makers of the most-prescribed GLP-1 medicines, so import duties are not currently adding to the cost of those products at the pharmacy ^[1]. Any price changes for patients are coming instead through the pricing agreements, not tariffs. Reuters reported that the largest savings from the earlier deals with large drugmakers have come from weight-loss drugs, with Novo Nordisk and Eli Lilly agreeing to price cuts in return for their medicines being made more available through Medicare ^[2].

How much those deals actually lower what patients pay is not clear. It is not known how many drugs the agreements cover or at what discounts, leaving the savings for the government or patients unknown, according to Reuters ^[2]. The administration has said its broader pricing push could save $64.3 billion in federal and state spending over the next decade, but Reuters described that figure as speculative ^[2]. Peter Maybarduk of the consumer advocacy group Public Citizen called the deals "a distraction from the administration's failed plan to lower U.S. drug prices to the levels paid in other wealthy countries" ^[2]. U.S. consumers currently pay nearly three times more for prescription medicines than people in other developed nations, Reuters reported ^[2].

What happens next

Sept. 29 is the date set for Section 232 tariff treatment to take effect for smaller companies not listed in the tariff proclamation's Annex III, according to a May 13 Commerce Department notice ^[1]. Companies can seek Commerce approval of company-specific onshoring agreements, and Commerce has said it will keep the information they submit confidential ^[1]. The tariff exemptions described so far run through Jan. 20, 2029 ^[1].

On the pricing side, Centers for Medicare & Medicaid Services Administrator Mehmet Oz said Aug. 31 that 600,000 seniors had sought prescriptions through a temporary pilot that began July 1 ^[2]. It has not been disclosed whether the mid-sized companies' agreements include arrangements like the direct-to-patient website used in the earlier deals with large manufacturers ^[2].