The Commerce Department announced on Thursday that it will not apply an ad‑valorem tariff to specialty drugs and their ingredients imported from India and 19 other countries. The waiver takes effect immediately, covering all goods listed in the Federal Register.
An ad‑valorem tariff is a percentage of a product’s value. The waiver applies to drugs for rare diseases, infertility, cell and gene therapies, antibody‑drug conjugates, and animal pharmaceuticals, as well as the active ingredients that make them.
The list of exempt countries includes India, Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the EU, Guatemala, Indonesia, Japan, Jordan, Malaysia, North Macedonia, South Korea, Switzerland, Liechtenstein, Taiwan, Thailand, Britain and Vietnam. Each of those jurisdictions has a trading or security agreement that explains why the U.S. chose a zero‑tariff rate.
The waiver follows a 100% tariff on patented pharmaceuticals announced by President Trump in April. That tariff, effective July 31 for some companies and September 29 for the rest, targets only patented drugs and excludes generics.
Industry analysts say the decision could cut the cost of life‑saving specialty drugs for U.S. patients. A representative from a rare‑disease patient group noted that the waiver could translate into “tangible savings” for those who currently rely on expensive imports.
The Treasury Department will enforce the tariff schedule, and the Commerce Department will monitor compliance. Companies importing specialty drugs from the listed countries can now file duty‑free claims, and a review of the broader tariff regime is slated for early 2027.
The next step is a congressional hearing scheduled for May 20 to evaluate the long‑term impact of tariff adjustments on the domestic pharmaceutical supply chain.