Money Watch•2 MIN READ

The Administration Is Considering Pharmaceutical Tariffs as High as 200 Percent. Drug Companies Are Warning of Price Increases.

Daniel Reeves

Updated Jun 29, 2026

Prescription drugs were exempted from the Section 122 tariffs that took effect in February. The exemption may be temporary. The Trump administration has signaled that pharmaceutical tariffs could climb toward 200 percent by late 2026 - a move that would hit drug costs for millions of Americans.

What You Should Know

J.P. Morgan’s global research team documented in April 2026 that the Trump administration has signaled pharmaceutical tariffs could ‘potentially rise toward 200% by mid- to late-2026.’ Pharmaceutical supply chains are heavily dependent on active pharmaceutical ingredients imported from India and China. A 200 percent tariff on those inputs would create significant cost pressure throughout the drug supply chain.

The Medicare drug negotiations that cut costs by 50 percent on 10 drugs apply only to those specific drugs - leaving thousands of other medications exposed to market pricing and any tariff pass-through.

The Money Trail

Americans spent more than $600 billion on prescription drugs in 2024. Price increases in even a fraction of that market represent billions in added household costs. For consumers not covered by employer insurance or Medicare Part D, the out-of-pocket cost impact would be direct and immediate.

Unlike Section 122 tariffs, which have a 150-day expiration, Section 232 pharmaceutical tariffs - which the administration is likely to use - would require an economic or national security justification but carry no automatic sunset. That makes them more durable and harder for Congress to reverse.

The Receipts

J.P. Morgan’s Global Research published the pharmaceutical tariff warning in April 2026. The Budget Lab at Yale and Tax Foundation confirmed pharmaceutical products are currently exempt from Section 122. Medicare’s 10-drug negotiation savings are confirmed by CMS.

What Happens Next

The pharmaceutical industry is lobbying against the tariff. The administration has not set a firm timeline. If Section 232 pharmaceutical tariffs are implemented, they would not require a congressional vote. Timing before year-end would affect 2026 drug costs for millions of Americans.

References: J.P. Morgan | Yale Budget Lab