The United States has exempted certain speciality pharmaceutical products and associated ingredients imported from India from its new pharmaceutical tariffs, allowing them to enter the country at a zero per cent tariff rate even as a 100 per cent duty on specified patented drugs takes effect for more companies from September 29.
The exemption covers medicines used for rare diseases as well as several specialised categories of pharmaceutical products. India is among 20 jurisdictions identified by the US Department of Commerce as eligible for the zero per cent rate under the tariff framework announced by President Donald Trump earlier this year.
Speciality drugs exempted
The eligible products include drugs for which all approved indications have been designated as orphan, a category covering treatments for rare diseases and conditions. Nuclear medicines, plasma-derived therapies, fertility drugs, cell therapies, gene therapies, antibody-drug conjugates, certain medical countermeasures and animal-health pharmaceutical products are also covered.
Associated pharmaceutical ingredients used in eligible products can similarly receive the zero tariff treatment. The Commerce Department said the definitions would apply to both investigational medicines and drugs approved or authorised by US regulators for the purpose of determining tariff eligibility.
India among 20 jurisdictions
Besides India, the jurisdictions identified for the zero per cent tariff treatment include Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, Indonesia, Japan, Jordan, Malaysia, North Macedonia, South Korea, Switzerland, Liechtenstein, Taiwan, Thailand, the United Kingdom and Vietnam.
The Commerce Department said the products from these jurisdictions qualified because they have a current or forthcoming trade and security framework agreement with the United States. Speciality pharmaceutical imports from other jurisdictions could also qualify if the Commerce Department determines that they meet an urgent US health need.
100 per cent duty
The exemptions form part of the implementation of Trump’s April 2 proclamation adjusting imports of pharmaceuticals and pharmaceutical ingredients under Section 232 of the Trade Expansion Act.
The proclamation imposed a 100 per cent ad valorem tariff on certain patented pharmaceutical products and associated pharmaceutical ingredients. The tariff took effect on July 31 for companies identified in an annex to the proclamation and will apply to other covered companies from September 29.
An ad valorem tariff is levied as a percentage of the value of the imported product.
Generics remain outside
Generic pharmaceutical products and their associated ingredients are not currently subject to the Section 232 pharmaceutical tariffs, according to the Commerce Department. This is significant for India, which is a major supplier of generic medicines to the US market.
The Federal Register notice also made several technical corrections to the original tariff framework. It amended the definition of generic pharmaceutical articles to specifically include unpatented animal-health products and clarified the scope of products classified as pharmaceutical articles.
Under the revised definition, pharmaceutical articles cover finished pharmaceutical products, their active pharmaceutical ingredients and key starting materials used to manufacture those active ingredients. Inactive ingredients and excipients are not included in the definition.
The changes relating to the speciality pharmaceutical tariff adjustments will apply to eligible goods entered for consumption, or withdrawn from warehouses for consumption, from 12.01 am US Eastern Time on September 29.