Following President Donald Trump's announcement of a 100% tariff on branded and patented pharmaceutical imports, pharmaceutical stocks have experienced a notable decline, falling up to 4%. The tariffs are scheduled to take effect on October 1st, 2025.

Trump announced the new tariffs on Truth Social, stating that the tariff would not apply to pharmaceutical companies that are currently building manufacturing plants in the U.S., which he defined as "breaking ground" or being "under construction".

The new tariffs are intended to encourage pharmaceutical companies to move their manufacturing operations to the United States. Trump has stated the tariffs will strengthen the American economy. He has also said that tariffs on heavy-duty trucks, kitchen cabinets, and furniture are to protect manufacturers from "unfair outside competition" and the "large-scale 'FLOODING' of these products into the United States by other outside Countries".

In 2024, the U.S. imported approximately $233 billion in pharmaceutical and medicinal products. A large percentage of U.S. biotech companies rely on imported components for at least half of their approved products.

The Pharmaceutical Research and Manufacturers of America opposed the new drug tariffs. They stated earlier in the year that 53% of the $85.6 billion in ingredients used to make medicines consumed in the U.S. were manufactured in the United States, with the remainder coming from Europe and other U.S. allies.

The announcement of the tariffs has created uncertainty in the market, leading to a drop in healthcare stocks. According to finance teams, healthcare stocks are leading the losses. Experts say that uncertainty often leads to problems for investment.

These tariffs are among numerous national security probes into potential new tariffs on a wide variety of products that Trump has launched during his second term.