FDA Launches Program to Boost Domestic Drug Production Amidst Tariff Threats

President Donald Trump is moving forward with a plan to impose a “small tariff” on imported pharmaceuticals, with rates eventually escalating to 250% over the next year and a half. The administration’s goal is to incentivize drugmakers to shift their manufacturing to the United States.

In an interview with CNBC, Trump confirmed the plan, stating that the initial tariff would be followed by an increase to 150% and then to 250% because “we want pharmaceuticals made in our country.” He did not specify the initial tariff rate but has previously mentioned rates of “25% or higher” for pharmaceuticals and semiconductor chips.

The FDA has also introduced a new program called FDA PreCheck to support this initiative. This program aims to expedite the construction and regulatory review process for new drug manufacturing plants in the US, aligning with the president’s executive order to reduce reliance on foreign drug supply.

“The FDA PreCheck initiative is one of many steps FDA is taking that can help reverse America’s reliance on foreign drug manufacturing,” said FDA Commissioner Marty Makary.

The program will involve a two-phase approach, providing for more frequent communication with the FDA during facility design and construction, as well as early feedback to streamline manufacturing and quality control processes. A public meeting on the program is scheduled for September 30.

The administration’s efforts have already prompted some major drugmakers, including AstraZeneca, Eli Lilly, and Johnson & Johnson, to commit billions of dollars to expand their US manufacturing operations.

Trump also indicated that tariffs on semiconductors and chips would be announced soon, with a recent report indicating a 100% tariff on imported chips unless companies are building in the US. This new tariff on semiconductors would also include exemptions for companies that are already building or have committed to building manufacturing facilities in the United States.

Under a current agreement, tariffs on pharmaceuticals and semiconductors between the US and the EU are at zero. However, if the US moves forward with its planned tariffs, they would be capped at 15%. The pharmaceutical industry’s main lobbying group, PhRMA, has not yet commented on the announcement.

Source: Reuters | August 7, 2025