US Exempts 20 Nations, Including India, From 100% Tariff On Specialty Drugs

The US has exempted India and 19 other nations from a 100% tariff on certain specialty drugs, including those used to treat rare diseases and infertility. The exempted countries include Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, Indonesia, Japan, Jordan, Malaysia, North Macedonia, South Korea, Switzerland, Liechtenstein, Taiwan, Thailand, Britain, and Vietnam.

The exemption applies to drugs used to treat rare diseases and infertility, as well as cell therapies, gene therapies, antibody-drug conjugates (ADCs), and animal pharmaceuticals. Components used in these products will also qualify for the zero tariff.

The countries eligible for the zero tariff have a current or forthcoming trade and security framework agreement with the US. This agreement is the basis for the exemption, which does not cover all medicines imported from India. Generic pharmaceutical products and their associated ingredients are not subject to the Section 232 pharmaceutical tariffs.

The 100% tariff on specified patented pharmaceuticals and ingredients was introduced by Trump's April proclamation, with the measure taking effect on July 31 for companies named in one annex. The measure will apply to other covered companies from September 29.

## What changed The latest notice makes technical corrections to the original proclamation, including an amendment to the definition of “generic pharmaceutical articles” to explicitly include unpatented animal health products. The notice clarifies that “pharmaceutical articles” covers finished pharmaceutical products, their active pharmaceutical ingredients, and the key starting materials used to make those ingredients.

## Why it matters The exemption is significant because it affects the import of specialty drugs used to treat rare diseases and infertility. The zero-tariff treatment will make these drugs more accessible and affordable for patients in the US. The exemption also highlights the importance of trade and security framework agreements between the US and other countries, including India. These agreements can have a direct impact on the pharmaceutical industry and the availability of life-saving drugs.

The US pharmaceutical market is a significant one, and the exemption will have implications for the industry as a whole. The exemption will also affect the trade relationships between the US and the exempted countries, including India. As the US continues to navigate its trade relationships with other countries, the exemption serves as a reminder of the complexities of international trade and the importance of agreements and negotiations.