The Bureau of Industry and Security has issued a notice defining the pharmaceutical products and listing the jurisdictions eligible to receive a zero Section 232 tariff rate.
Presidential proclamation 11020 imposes Section 232 tariffs of 10 to 100 percent on imports of patented pharmaceuticals and their ingredients. The proclamation provides a number of exceptions from these tariffs, including the following, which the BIS notice defines as indicated.
- orphan drugs (drugs or biological products designated for one or more rare diseases or conditions and for which all approved indications are for one or more such rare diseases or conditions)
- nuclear medicines (drugs that meet the definition of “radioactive drug” or biological products that meet the definition of “radioactive biological product”)
- plasma-derived therapies (biological products derived from human whole blood or plasma)
- fertility drugs (drugs or biological products for the treatment of infertility, including drugs approved for the treatment of ovulatory dysfunction in women desiring pregnancy)
- cell therapy products (biological products that are a cellular immunotherapy, cellular cancer vaccine, or other type of autologous or allogeneic cellular product approved for one or more therapeutic indications, including hematopoietic stem cell products and adult and embryonic stem cell products)
- gene therapy products (biological products intended to modify or manipulate the expression of a gene or to alter the biological properties of living cells for therapeutic use)
- antibody drug conjugates (combination products composed of a small-molecule drug (payload) and an antibody or antibody fragment, conjugated together by a chemical linker)
- medical countermeasures related to chemical, biological, radiological, and nuclear threats (drugs or biological products for use to diagnose, prevent, or treat diseases or conditions caused by chemical, biological, radiological, or nuclear threat agents, including emerging infectious diseases)
- drugs for animal health (articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in animals; articles (other than food) intended to affect the structure or any function of an animal’s body; or articles intended for use as components of such products)
However, to be eligible for the zero tariff rate such products must (1) be products of a jurisdiction that has a current or forthcoming trade and security framework agreement or (2) meet an urgent U.S. health need. According to the notice, eligible jurisdictions currently include Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, India, Indonesia, Japan, Jordan, Malaysia, North Macedonia, South Korea, Switzerland and Liechtenstein, Taiwan, Thailand, the United Kingdom, and Vietnam. Changes to this list may be published in a future notice.
The notice also sets forth procedures for the submission and consideration of requests for BIS approval (at the zero Section 232 tariff rate) for imports of pharmaceutical products that meet an urgent U.S. health need.
Finally, this notice makes several technical corrections to the original proclamation, including (1) amending the definition of “generic pharmaceutical articles” to specifically include unpatented animal health products, and (2) clarifying that the definition of “pharmaceutical articles” only encompasses finished pharmaceutical products, their active pharmaceutical ingredients, and the key starting materials of such ingredients.
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