The news: President Trump amended an executive order to include generic drugs among the products eligible for lower tariffs. Generic pharmaceuticals could get lower-than-established reciprocal tariff rates if trading partners make deals, per the memo issued late Friday.

Why it matters: Trump first proposed a 25% tariff on pharmaceutical products, but escalated the threat to 250% in August.

• A recent deal with Europe caps tariffs on generics and active pharmaceutical ingredients at 15%.
• Generic drugs account for some 90% of US prescriptions, and the new order could apply to US generic suppliers like India and China which account for 35% (India) and of 8% (China), per a US Pharmacopeia analysis of 2024 imports.
• The EU accounts for 18% and the US makes 12%, per USP.

Our first take: While the new missive is short on specifics, it’s another step back from pharma tariffs by the administration. Pharma companies and especially generic drugmakers with slim profit margins and little ability to construct new US manufacturing, can breathe another sigh of relief.

This is our immediate perspective. We’re actively developing this story throughout the day with more research and data from the EMARKETER database. Our in-depth analysis will be included in our client-only Briefings. Non-clients can click here to get a demo of our full platform and coverage.

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• Johnson & Johnson adds momentum to pharma’s US manufacturing surge
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