On April 16, 2025, the Department of Commerce announced that it had initiated an investigation into the effects pharmaceutical ingredients and products have on national security. The Department’s investigation is likely to focus on several factors including the current and projected demand for pharmaceuticals in the US, to what extent domestic production can meet the domestic demand, and the role foreign supply chains play on meeting the US demand for pharmaceuticals. The Department has until December 27, 2025, to prepare a report advising the President of the United States as to whether pharmaceuticals are being imported in a quantity or circumstance that threatens national security and, if so, to provide recommendations for action. These recommendations can include imposing fees, quotas, or tariffs, or outlining steps to increase domestic production. The President then has 90 days to determine the action that will or will not be taken to address a national security threat. It is likely that this investigation results in some action, with new tariffs being the most likely outcome. These tariffs could begin as early as mid-May 2025 depending on the completion of the report advising the President. It is anticipated legal challenges to the tariffs arising from the investigation will likely occur from the pharmaceutical industry. This could result in higher drug costs for patients in the US, however pharmaceutical exports from Europe to the US have surged as companies stockpile ahead of these potential tariffs.
