The U.S. Department of Commerce's Bureau of Industry and Security BIS has published a significant notice detailing the implementation of zero ad valorem tariffs for certain specialty pharmaceuticals and their ingredients. This action, published in the Federal Register on September 23, 2026, directly follows Presidential Proclamation 11020, issued by President Trump on April 2, 2026.
Background on Section 232 Pharmaceutical Tariffs
President Trump's Proclamation 11020, titled "Adjusting Imports of Pharmaceuticals and Pharmaceutical Ingredients Into the United States," concurred with the Secretary of Commerce's finding that certain pharmaceutical imports threatened U.S. national security. Consequently, the proclamation imposed a 100 percent ad valorem tariff on specific patented pharmaceuticals and associated ingredients. These tariffs became effective on July 31, 2026, for companies listed in Annex III of the proclamation, and on September 29, 2026, for all other companies. It is important to note that these Section 232 pharmaceutical tariffs do not currently apply to generic pharmaceutical products or their ingredients.
However, Proclamation 11020 also outlined specific conditions under which a zero-tariff rate could apply. This latest notice from the Department of Commerce provides the necessary guidance and procedures to enact these exemptions, clarifying which products and jurisdictions qualify.
Eligible Pharmaceutical Products for Zero Tariffs
President Trump's Proclamation 11020 directed a zero-tariff rate for specific categories of pharmaceuticals and associated ingredients. The Department of Commerce, in consultation with the Food and Drug Administration FDA and the U.S. Department of Agriculture Center for Veterinary Biologics, has now defined these products. The definitions are solely for the purpose of determining eligibility for the zero-tariff rate under Proclamation 11020 and include both investigational drugs and FDA-approved or FDA-authorized drugs. The defined categories are:
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Orphan Drugs: Drugs or biological products designated under the Orphan Drug Act, where all approved or licensed indications are for one or more rare diseases or conditions.
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Nuclear Medicine: Drugs defined as radioactive drugs or biological products defined as radioactive biological products.
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Plasma Derived Therapies: Biological products derived from human whole blood or plasma.
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Fertility Drugs: Drugs or biological products for the treatment of infertility, including those approved for ovulatory dysfunction in women desiring pregnancy.
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Cell Therapy Products: Biological products that are cellular immunotherapies, cellular cancer vaccines, or other autologous or allogeneic cellular products approved for therapeutic indications, including stem cell products.
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Gene Therapy Products: Biological products intended to modify or manipulate gene expression or alter biological properties of living cells for therapeutic use.
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Antibody Drug Conjugates: Combination products comprising a small-molecule drug payload and an antibody or antibody fragment, joined by a chemical linker.
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Medical Countermeasures: Drugs or biological products for diagnosing, preventing, or treating diseases or conditions caused by chemical, biological, radiological, or nuclear CBRN threats, including emerging infectious diseases.
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Animal Healthcare Products: Articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in animals, or to affect an animal's body structure or function, including veterinary pharmaceuticals and biologics.
For these products to receive the zero-tariff rate, they must meet one of two conditions: they must be products of a jurisdiction that has a current or forthcoming trade and security framework agreement, as referenced in President Trump's Executive Order 14346 of September 5, 2025, or they must meet an urgent U.S. health need.
Eligible Jurisdictions
The notice explicitly lists the jurisdictions currently eligible for the zero-tariff adjustment for the specified pharmaceutical products. These include Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, India, Indonesia, Japan, Jordan, Malaysia, North Macedonia, the Republic of Korea, Switzerland and Liechtenstein, Taiwan, Thailand, the United Kingdom, and Vietnam. Commerce has indicated that this list may be updated in future notices.
Procedures for Urgent U.S. Health Need Approval
Companies seeking a zero-tariff rate for eligible pharmaceutical products that meet an urgent U.S. health need must submit an electronic request to the Bureau of Industry and Security. Each application must be for a single product and requires detailed information:
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Organization Information: Full legal name and address of the company, along with the authorized representative's contact details.
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Product Information: The Harmonized Tariff Schedule of the United States HTSUS classification if possible, advertised name and brand or Investigational New Drug Application number, active ingredient or combination of ingredients, the category of the product orphan, nuclear medicine, etc., country of origin, country of export, importer of record information, and manufacturer's name and address.
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Rationale for Urgent Need: A comprehensive explanation of why the import meets an urgent U.S. health need. This rationale can include details such as the type of disease treated, an assessment of alternative therapies or their absence, the number of U.S. patients using the product, and its availability in other jurisdictions.
These requests are for patented pharmaceutical products and associated ingredients covered under Annex I of Proclamation 11020. Submissions are accepted on an ongoing basis. The Department of Commerce will review each request individually, consulting with the U.S. Trade Representative USTR and the Department of Health and Human Services HHS to determine if an urgent U.S. health need is met. Decisions will be fact-specific and company-specific.
Implications and Outlook
This new guidance represents a critical step in the implementation of President Trump's Proclamation 11020, attempting to balance the declared national security interests with the practicalities of public health and access to specialized medicines. The detailed definitions and application procedures provide clarity for pharmaceutical manufacturers and importers navigating the complex tariff landscape. The ongoing submission process for urgent health needs underscores a flexible mechanism to address emergent health crises or persistent unmet medical demands. Stakeholders will be closely watching how these tariff adjustments impact pharmaceutical supply chains, domestic production incentives, and the availability of advanced therapies in the U.S. market, particularly given the reliance on global sourcing for many of these specialized products. The emphasis on trade and security framework agreements also highlights a broader strategic alignment in U.S. trade policy.
