A new form has entered the drug approval process.
It is not a clinical trial. It is not a formulary application. It is a Section 232 national security proclamation issued on April 2, 2026, and it comes with seven tariff headings, two federal agency agreements, a zero-duty window expiring January 20, 2029, and a one-year review clock on the drugs that 91 percent of Americans actually take.
The Bureau of Pharmaceutical Customs presents the procedure.
The Compliance Structure
The proclamation establishes seven mutually exclusive tariff headings — HTSUS codes 9903.04.60 through 9903.04.66 — for all patented pharmaceutical products and active pharmaceutical ingredients imported into the United States. Each heading is a level of access. Each level has a price.
The default heading is 9903.04.60. It applies to any Orange Book or Purple Book-listed patented drug imported by a company that has not taken further action. The rate is 100 percent. This is the rate for companies that have declined to participate in the procedure.
A company that commits to onshoring domestic manufacturing receives heading 9903.04.64. The rate is 20 percent, rising to 100 percent on April 2, 2030. This is the heading for companies that have filed an intention.
A company that signs a Most Favored Nation pricing agreement with the Department of Health and Human Services AND an onshoring agreement with the Department of Commerce receives heading 9903.04.65. The rate is zero, through January 20, 2029.
Zero. In exchange for matching international drug prices and agreeing to manufacture in America.
BUREAU NOTE: The reader may wish to compare this structure to a formulary. A formulary is a list of covered drugs with associated pricing tiers. Companies that agree to coverage terms receive preferred tier placement. Companies that do not are placed on a less favorable tier. The Bureau notes that what was previously administered by insurance committees is now administered by the Harmonized Tariff Schedule of the United States. The coverage determination has been reclassified as a customs decision.
The Compliance History
This is not the first time the administration has attempted this objective.
On September 13, 2020, during the first Trump term, Executive Order 13948 directed the Department of Health and Human Services to test a Medicare payment model under which the United States would pay no more for prescription drugs than the lowest price paid by any comparable developed nation. This was MFN pricing through healthcare policy.
Three federal courts blocked it before a single dose was repriced. The U.S. District Court for the District of Maryland issued a temporary restraining order on December 23, 2020. The Southern District of New York and the Northern District of California issued preliminary injunctions shortly after. The policy was never implemented. The Biden administration removed it. The Inflation Reduction Act later permitted Medicare to negotiate prices on a restricted list of drugs.
On April 2, 2026, the same pricing objective was issued again. This time it did not arrive via the Centers for Medicare and Medicaid Services. It arrived via Section 232 of the Trade Expansion Act of 1962 — the national security trade authority used to impose tariffs on steel and aluminum.
The healthcare corridor was closed by the courts. The trade corridor was still open. The objective is six years old. It has changed departments twice, survived two administrations, and relocated its statutory address from Medicare to Customs. The Bureau notes that persistence of this kind is not a policy characteristic. It is the policy.
BUREAU NOTE: The Bureau's records show that the policy was blocked in 2020. The Bureau's experience suggests that blocked policies rarely retire — they relocate. The institutional question is never whether the objective has been abandoned. The question is which corridor it is currently using. In this case: Customs and Border Protection, column one duties, seven headings, effective July 31, 2026.
The Compliance Roster
Seventeen major pharmaceutical companies were named in the proclamation's Annex III. Each received letters directing them to implement MFN pricing.
Fifteen have now signed agreements.
The first round of deals included Pfizer, AstraZeneca, EMD Serono, Eli Lilly, and Novo Nordisk. A second round brought in Amgen, Boehringer Ingelheim, Bristol Myers Squibb, Genentech, Gilead, GSK, Merck, Novartis, and Sanofi. Johnson & Johnson subsequently signed, bringing the count to fifteen.
The deal terms, as reported, require companies to lower prices for Medicaid, offer direct-to-consumer discounts through a platform called TrumpRx.gov, and launch new drugs at prices benchmarked against other developed nations. Some companies agreed to donate raw materials to a national pharmaceutical stockpile.
In exchange: heading 9903.04.65. Zero tariff. Three years.
AbbVie and Regeneron have not signed. They are among the seventeen. For them, July 31, 2026 is the effective date of the 100 percent tariff on their patented imported products. Regeneron's chief scientist told reporters the company assumes an agreement will happen. The Bureau notes that assuming and signing are different headings.
The Exemption Waiting Room
The proclamation contains a category that deserves its own paragraph.
Generic pharmaceuticals — the drugs that account for 91 percent of all prescriptions written in the United States — are not subject to the tariffs. Nor are biosimilars, orphan drugs, nuclear medicines, plasma-derived therapies, fertility treatments, cell and gene therapies, medical countermeasures for biological or chemical threats, or animal health products.
They are exempt because the order says so. They are exempt until the Department of Commerce completes a reassessment — which the order also requires, within one year.
The Bureau observes what the exemption contains. Over 92 percent of the facilities that manufacture generic active pharmaceutical ingredients for the American market are located outside the United States. China accounts for 95 percent of US ibuprofen imports. Ninety-one percent of hydrocortisone. Seventy percent of acetaminophen. The exemption is not generosity. It is a supply-chain confession. Drug shortages reached a record 323 active instances in early 2024, and more than 80 percent of those shortages involved generic drugs. In early 2025, 90 shortages persisted.
The New England Journal of Medicine noted, in September 2025, that pharmaceutical tariffs would increase costs for public health payers and reduce availability of generic medicines — specifically naming low-margin older oncology drugs, antibiotics, intravenous fluids, epinephrine, and heparin as the categories at highest discontinuation risk.
All of those drugs are currently in the waiting room. Their appointment is scheduled within the next twelve months.
BUREAU NOTE: The present order disciplines the expensive patented drugs. The drugs that most Americans depend on most often are exempted, pending review. The Bureau notes that this is a sensible sequencing for a compliance rollout: address the visible problem first, then open the file on the structural one. The one-year reassessment clock began April 2, 2026. The Bureau will update the procedure guide accordingly when Commerce reports its findings. Patients awaiting that update are advised to continue their current prescriptions in the meantime, subject to availability, which is itself subject to the findings, which are themselves subject to the procedure.
The Bureau of Pharmaceutical Customs is a sub-department of the Bureau of Public Agreement™. It files dispatches on the intersection of medical necessity and administrative procedure. Prior to April 2, 2026, the Bureau had no pharmaceutical portfolio. As of April 2, 2026, it does. The Bureau notes that its own reclassification — from non-existent to operational — mirrors the reclassification it documents. The procedure creates the office that files the procedure.