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Commerce Defines Zero-Tariff Specialty Pharma Categories Under Section 232 Proclamation 11020

The Bureau of Industry and Security has published definitions and procedures governing which pharmaceutical products qualify for a zero ad valorem tariff rate under the April 2026 presidential proclamation imposing Section 232 tariffs on drug imports.

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Background: Proclamation 11020 and the Section 232 Tariff Framework

On April 2, 2026, the President issued Proclamation 11020, "Adjusting Imports of Pharmaceuticals and Pharmaceutical Ingredients Into the United States," concurring with the Secretary of Commerce's finding that pharmaceuticals and associated pharmaceutical ingredients are being imported into the United States in such quantities and under such circumstances as to threaten to impair national security, pursuant to section 232 of the Trade Expansion Act of 1962 (19 U.S.C. 1862). The proclamation imposed a 100 percent ad valorem tariff on certain imports of patented pharmaceuticals and associated pharmaceutical ingredients. According to the notice, that tariff took effect July 31, 2026 for companies listed in Annex III of the Proclamation, and September 29, 2026 for all other companies. The notice states that Section 232 pharmaceutical tariffs do not, at this time, apply to generic pharmaceutical products and associated ingredients.

Zero-Tariff Eligibility: Specialty Product Categories

Clause 3(d) of Proclamation 11020 directed a zero ad valorem tariff rate to apply to a defined set of specialty pharmaceutical products and associated ingredients. The Commerce Department, in consultation with the Food and Drug Administration (FDA) and the U.S. Department of Agriculture Center for Veterinary Biologics, has now published formal definitions for each product category. The categories eligible for the zero rate are: drugs where all approved or licensed indications are designated as orphan; nuclear medicines; plasma derived therapies; fertility drugs; cell therapy products; gene therapy products; antibody drug conjugates; medical countermeasures related to chemical, biological, radiological, and nuclear threats; and pharmaceutical products for animal health.

The notice specifies that to qualify for the zero rate, these products must meet one of two conditions established by the Proclamation: they must be products of a jurisdiction that has a current or forthcoming trade and security framework agreement as referenced in Executive Order 14346, "Modifying the Scope of Reciprocal Tariffs and Establishing Procedures for Implementing Trade and Security Agreements" (September 5, 2025), or they must meet an urgent U.S. health need. The Secretary of Commerce makes these determinations in consultation with the U.S. Trade Representative and the Secretary of Health and Human Services.

Definitions and Scope

The definitions published by Commerce are stated to be solely for purposes of determining eligibility for the zero tariff rate under Proclamation 11020 and are not to be construed as binding guidance for any other purpose. The notice clarifies that the definitions cover imports of investigational drugs as well as FDA-approved or FDA-authorized drugs, and that Commerce reserves the right to modify these definitions in the future.

The definition of an orphan-designated drug covers a drug or biological product designated under Section 526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bb) for one or more rare diseases or conditions, for which all approved indications under Section 505 of the Federal Food, Drug, and Cosmetic Act or licensed under Section 351 of the Public Health Service Act (42 U.S.C. 262) are for one or more such rare diseases or conditions. Nuclear medicine is defined as a drug meeting the definition of "radioactive drug" in 21 CFR 310.3(n) or a biological product meeting the definition of "radioactive biological product" in 21 CFR 600.3(ee).

Procedures for Urgent U.S. Health Need Submissions

The notice establishes a process by which the public may submit information for Commerce's review to determine whether imports of specialty pharmaceutical products and associated ingredients meet an urgent U.S. health need. The notice states that submissions will be received on an ongoing basis starting September 23, 2026.

Technical Corrections

The notice also issues five technical corrections to Annex I and one technical correction to Annex IV of Proclamation 11020. Proclamation 11020 directed the Secretary, in consultation with the Chair of the U.S. International Trade Commission and the Commissioner of U.S. Customs and Border Protection, to determine whether modifications to the Harmonized Tariff Schedule of the United States (HTSUS) or other administrative measures are necessary to implement the Proclamation, with any changes to be published in a Federal Register notice.

What to Watch

  • The 100 percent ad valorem tariff on patented pharmaceuticals took effect September 29, 2026 for all companies not listed in Annex III of Proclamation 11020.
  • Public submissions on urgent U.S. health need are accepted on an ongoing basis starting September 23, 2026.
  • Commerce has reserved the right to modify the published specialty pharmaceutical definitions in the future.

Related

Sources

19 cited

Every hard fact above is grounded in and cited to a primary source record.

  1. On April 2, 2026, the President issued Proclamation 11020, 'Adjusting Imports of Pharmaceuticals and Pharmaceutical Ingredients Into the United States.'

    federalregister.gov

  2. Proclamation 11020 concurred with the Secretary of Commerce's finding that pharmaceuticals and associated pharmaceutical ingredients are being imported into the United States in such quantities and under such circumstances as to threaten to impair national security, pursuant to section 232 of the Trade Expansion Act of 1962 (19 U.S.C. 1862).

    federalregister.gov

  3. Proclamation 11020 imposed a 100 percent ad valorem tariff on certain imports of patented pharmaceuticals and associated pharmaceutical ingredients.

    federalregister.gov

  4. The 100 percent tariff took effect July 31, 2026 for companies listed in Annex III of Proclamation 11020.

    federalregister.gov

  5. The 100 percent tariff took effect September 29, 2026 for all other companies.

    federalregister.gov

  6. Section 232 pharmaceutical tariffs do not, at this time, apply to generic pharmaceutical products and associated ingredients.

    federalregister.gov

  7. To qualify for the zero rate, products must be from a jurisdiction with a current or forthcoming trade and security framework agreement as referenced in Executive Order 14346, or they must meet an urgent U.S. health need.

    federalregister.gov

  8. Executive Order 14346 is titled 'Modifying the Scope of Reciprocal Tariffs and Establishing Procedures for Implementing Trade and Security Agreements' and is dated September 5, 2025.

    federalregister.gov

  9. The Secretary of Commerce makes zero-tariff eligibility determinations in consultation with the U.S. Trade Representative and the Secretary of Health and Human Services.

    federalregister.gov

  10. The published definitions are solely for purposes of determining eligibility for the zero tariff rate under Proclamation 11020 and are not to be construed as binding guidance for any other purpose.

    federalregister.gov

  11. The definitions cover imports of investigational drugs as well as FDA-approved or FDA-authorized drugs.

    federalregister.gov

  12. Commerce reserves the right to modify these definitions in the future.

    federalregister.gov

  13. Nuclear medicine is defined as a drug meeting the definition of 'radioactive drug' in 21 CFR 310.3(n) or a biological product meeting the definition of 'radioactive biological product' in 21 CFR 600.3(ee).

    federalregister.gov

  14. The notice establishes a process by which the public may submit information for Commerce's review to determine whether imports meet an urgent U.S. health need, with submissions accepted on an ongoing basis starting September 23, 2026.

    federalregister.gov

  15. The notice issues five technical corrections to Annex I and one technical correction to Annex IV of Proclamation 11020.

    federalregister.gov

  16. Proclamation 11020 directed the Secretary, in consultation with the Chair of the U.S. International Trade Commission and the Commissioner of U.S. Customs and Border Protection, to determine whether modifications to the HTSUS or other administrative measures are necessary to implement the Proclamation.

    federalregister.gov

  17. Clause 3(d) of Proclamation 11020 directed a zero ad valorem tariff rate to apply to drugs where all approved or licensed indications are designated as orphan, nuclear medicines, plasma derived therapies, fertility drugs, cell therapy products, gene therapy products, antibody drug conjugates, medical countermeasures related to chemical, biological, radiological, and nuclear threats, and pharmaceutical products for animal health.

    federalregister.gov

  18. Commerce consulted with the FDA and the U.S. Department of Agriculture Center for Veterinary Biologics to produce the definitions of pharmaceutical products listed in clause 3(d) of Proclamation 11020.

    federalregister.gov

  19. An orphan-designated drug is defined as a drug or biological product designated under Section 526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bb) for one or more rare diseases or conditions, for which all approved indications under Section 505 of the Federal Food, Drug, and Cosmetic Act or licensed under Section 351 of the Public Health Service Act (42 U.S.C. 262) are for one or more such rare diseases or conditions.

    federalregister.gov

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