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President Donald Trump announced Tuesday that generic drugs imported into the U.S. will remain exempt from tariffs for two years before facing duties of up to 200%, as his administration seeks to push pharmaceutical manufacturing back to the U.S.
Beginning August 1, imported generic medicines will continue to face a 0% tariff for two years before duties increase to 100% for one year and then 200%, according to a post by Trump on Truth Social.
Trump Gives Drugmakers Two-Year Window
Trump said the policy is designed to encourage drugmakers to relocate generic pharmaceutical manufacturing to the U.S., with companies that fail to build domestic plants during the transition period facing penalties.
“This is done in order to RESHORE Generic Pharmaceutical Production into America,” Trump added.
Generic drugs account for more than 90% of prescriptions filled in the U.S., according to the Food and Drug Administration.
Drugmakers to Expand US Manufacturing
The generic drug policy expands on the administration’s earlier strategy for branded and patented medicines, under which major drugmakers agreed to lower prices in exchange for temporary tariff exemptions.
In December, nine drugmakers, including Bristol Myers Squibb Co. , Merck & Co. Inc. , Novartis AG , Amgen Inc. and GSK plc , committed to bringing U.S. drug prices more in line with those in other developed countries. Johnson & Johnson committed to new manufacturing investments under those agreements earlier this year, while Merck pledged more than $70 billion toward domestic research and production.
Trump said pharmaceutical facilities are now being built across the U.S. “at a level never seen before.”
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This article Trump Sets August 1 Start for Generic Drug Tariff Clock, Warns of 200% Duties: Companies Must 'Build Plant and Equipment' in US originally appeared on Benzinga.com.
