President Donald Trump announced a new round of tariffs beginning in October 2025 that would impose a 100% duty on brand name drugs imported to the United States.

There's a major exemption to the brand name drug tariffs – pharmaceutical companies that have already broken ground on building a U.S. manufacturing plant will be exempt, Trump said.

The tariffs also won't apply to countries that already have negotiated trade deals such as Japan and European Union nations.

"Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America," Trump said in a social media post on Sept. 25.

Here's how it might affect your wallet.

How much more will I pay due to tariffs?

About 90% of prescriptions Americans fill at the pharmacy or via mail order are generic drugs. Trump's tariff announcement specified brand-name or patented drugs, which could mean the generics are exempted from this round of tariffs.

Brand-name drugs are protected by patents allowing drug companies to exclusively sell medications without direct competition. Drug companies have no limits when setting prices for brand-name drugs, but the amount consumers pay depends on negotiations hashed out with insurers and pharmacy benefit managers. Insurance plan requirements such as copays and deductibles − the amount a consumer must pay before coverage kicks in − also impacts how much you will pay.

Once a drug is no longer eligible for patent protection, generic manufacturers can make and sell similar versions of branded drugs, which theoretically lowers prices for consumers.

But drug pricing is complex formula often shaped by a mix of government rebate policies, drug pricing middlemen, insurance companies and pharmaceutical shareholder demands.

"The prices in the U.S. are real and fake at the same time," said Antonio Ciaccia, CEO of 46brooklyn and a drug pricing expert. "There is this inherent fluff that is caked under list prices in the U.S. system."

Should drug companies be assessed 100% tariffs, it could accelerate prices, in part, due to federal rebate requirements. A federal law that took effect in 2024 required drug companies to pay a penalty, or a rebate, to Medicaid if they raise prices higher than the rate of inflation.

If drugmakers must pay 100% tariffs − on top of steeper Medicaid rebates − it could send drug prices even higher, Ciaccia said.

"You're going to have to put your foot on the gas of price increases even higher than you otherwise would," Ciaccia said.

How are drug manufacturers reacting to the new tariffs?

The Pharmaceutical Research and Manufacturers of America, which represents drug companies, said more than half of ingredients used in medicines consumed in the U.S. are manufactured in the U.S.

Major drug companies such as AstraZeneca, Eli Lilly and Roche have announced new major domestic drug manufacturing facilities in the U.S.

"Tariffs risk those plans because every dollar spent on tariffs is a dollar that cannot be invested in American manufacturing or the development of future treatments and cures," said Alex Schriver, senior vice president of PhRMA. "Medicines have historically been exempt from tariffs because they raise costs and could lead to shortages."

The Association for Accessible Medicines, which represents generic drug manufacturers, is awaiting more details beyond the president's social media post, said spokesman Brian Hart.

Generic drugmakers largely have been exempt from tariffs negotiated in previous trade deals. But the industry could be impacted by tariffs on pharmaceutical equipment and delivery devices such as IV bags and inhalers. Aluminum tariffs also could impact generic drugmakers because many pill products have a foil package.

Contributing: Reuters

This article originally appeared on USA TODAY: Trump announced new drug tariffs. How much will you pay at the pharmacy counter?

Reporting by Ken Alltucker, USA TODAY / USA TODAY

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