Pharmaceutical Section 232 Tariffs: U.S. Department of Commerce Clarifies Specialty Drug Exemptions Before September 29 Deadline

Key Takeaways

• The U.S. Department of Commerce has clarified the specialty pharmaceutical product exemption from Section 232 tariffs, but eligibility is not automatic. Covered products must satisfy the specialty pharmaceutical definition and qualify through an eligible trade and security framework or an urgent U.S. health need.
• Pharmaceutical companies seeking an urgent U.S. health need exemption should act before the September 29 tariff effective date. The Department of Commerce requires separate product-level requests with detailed tariff, origin, manufacturing, importer, and patient-need information.
• The urgent U.S. health need pathway is narrower than the broader specialty pharmaceutical exemption. It applies only to patented pharmaceutical products and associated ingredients covered by the HTSUS provisions in Annex I of Proclamation 11020.

In anticipation of the pharmaceutical Section 232 tariffs taking effect on September 29, 2026, the U.S. Department of Commerce has released a Federal Register notice clarifying the availability and application of the exemption for certain “specialty pharmaceutical products.” The notice also provides several important corrections and clarifications regarding the scope of the pharmaceutical Section 232 measures.

What Pharmaceutical Companies Should Know About the Section 232 Tariff Exemptions

• The specialty pharmaceutical product exemption is not automatic. A product must meet the applicable specialty pharmaceutical product definition and qualify either through the trade and security framework pathway or the urgent U.S. health need pathway.
• Products with a U.S. Customs and Border Protection (“CBP”) country of origin in specified countries or territories with a current or forthcoming U.S. trade and security framework agreement may qualify for the exemption, provided they meet the relevant specialty pharmaceutical product definition.
• Companies seeking an exemption based on an urgent U.S. health need must submit a separate request for each product. Submissions will be accepted on an ongoing basis, but companies should submit requests as soon as possible to allow the Department of Commerce time to review and issue decisions before the tariffs take effect on September 29, 2026.
• Urgent U.S. health need submissions must include specified organizational, product, tariff, origin, importer, manufacturer, and patient-need information.
• The urgent U.S. health need pathway is available only for patented pharmaceutical products and associated ingredients covered under the HTSUS codes listed in Annex I of Proclamation 11020.
• The Department of Commerce has clarified that “pharmaceutical articles” are limited to finished pharmaceutical products, APIs, and APIs’ key starting materials.
• The notice modifies the definition of “generic pharmaceutical articles” to expressly include unpatented animal health products, but it does not clarify whether the term includes human pharmaceutical products that do not otherwise qualify as “patented pharmaceutical articles.”
• A new zero-duty Chapter 99 subheading applies to covered products imported solely for clinical trials, research and development, or other non-commercial applications.

Which Specialty Pharmaceutical Products Are Exempt From Section 232 Tariffs?

The notice provides that the specialty pharmaceutical product exemption is available only for:

1. Products of countries or territories that have a current or forthcoming trade and security framework agreement with the United States; or
2. Products that meet an urgent U.S. health need.

Accordingly, eligibility for the specialty pharmaceutical product exemption is not automatic. A product must meet the applicable specialty pharmaceutical product definition and satisfy one of these two exemption pathways.

Products meeting the applicable specialty pharmaceutical product definition, with a country of origin determined under CBP rules in one of the following countries or territories, will be eligible under the trade and security framework exemption: Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, India, Indonesia, Japan, Jordan, Malaysia, North Macedonia, the Republic of Korea, Switzerland and Liechtenstein, Taiwan, Thailand, the United Kingdom, and Vietnam.

How Can Companies Request an Urgent U.S. Health Need Exemption?

The Federal Register notice establishes a procedure for requesting an exemption for products meeting an urgent U.S. health need. Submissions will be accepted on an ongoing basis starting on the date of publication of the notice, but companies should submit requests as soon as possible to allow the Department of Commerce time to review and issue decisions before the tariff effective date. Requests must be submitted on a product-by-product basis. A company must therefore file a separate request for each product for which it seeks an exemption. The urgent U.S. health need pathway is available only for patented pharmaceutical products and associated ingredients covered under the HTSUS codes listed in Annex I of Proclamation 11020.

Each request must include:

• The full legal name and address of the company, as well as the name, title, and contact information of the authorized representative submitting the application.
• The product’s HTSUS classification (10-digit, if possible).
• The advertised name and brand name of the product, or the INDA, as applicable, as well as the active ingredient (or combination of active ingredients).
• The relevant specialty pharmaceutical product category.
• The CBP country of origin and country of export.
• The name and IOR number of the importer(s) of record.
• The name and address of the manufacturer.
• A rationale explaining why the product meets an urgent U.S. health need, including, as applicable, the disease or condition treated; the availability, adequacy, or absence of alternative therapies; the number of U.S. patients using the product; and whether the product is available in other jurisdictions.

The notice does not state whether “manufacturer” refers to the API manufacturer or the manufacturer of the drug in its imported form. Pending further guidance, we recommend identifying the manufacturer reflected on the CBP Form 7501 or, if appropriate, the last manufacturer before importation.

What Else Did the Department of Commerce Clarify About the Pharmaceutical Section 232 Tariffs?

The notice contains several long-awaited corrections and clarifications regarding the pharmaceutical Section 232 measures:

• The definition of “generic pharmaceutical articles” has been revised to expressly include unpatented animal health products.
• The notice does not clarify whether generic pharmaceutical articles include human pharmaceutical products that do not otherwise meet the definition of “patented pharmaceutical articles.”
• A new special Chapter 99 subheading (9903.04.70) with a zero ad valorem duty rate applies to imports of products listed in note (c) of Annex I that are solely intended for clinical trials, research and development, or other non-commercial applications.
• “Pharmaceutical articles” include only finished pharmaceutical products, their APIs, and APIs’ key starting materials. Inactive ingredients and excipients are not pharmaceutical articles.
• Heading 9903.04.69 applies to articles classifiable under the HTSUS provisions enumerated in subdivision (c) of U.S. note 40 that are either: (1) not “pharmaceutical articles” as defined in subdivision (c)(i), or (2) “pharmaceutical articles” that are neither “patented pharmaceutical articles” nor “generic pharmaceutical articles” as those terms are defined in subdivisions (c)(ii) and (c)(iii).
• The notice incorporates the July 1, 2026, changes to the tariff schedule for Chapter 29 and Chapter 30 articles.
• The notice corrects an inconsistency in Annex IV by removing five HTSUS codes that overlap with Annex I: 2937.23.50, 3002.13.00, 3002.14.00, 3002.15.00, and 3004.49.00.

Which Products Qualify as Specialty Pharmaceutical Products?

For purposes of the exemption, “specialty pharmaceutical products” include the following:

• Orphan drug products
• Nuclear medicine
• Plasma-derived therapies
• Fertility drugs
• Cell therapy products
• Gene therapy products
• Antibody-drug conjugates
• Medical countermeasures related to chemical, biological, radiological, and nuclear threats
• Animal healthcare products

How the Department of Commerce Defines Specialty Pharmaceutical Products

An orphan drug product is a drug or biological product designated under Section 526 of the Federal Food, Drug, and Cosmetic Act for one or more rare diseases or conditions, where all approved or licensed indications are for one or more such rare diseases or conditions.

• Nuclear medicine includes drugs meeting the definition of “radioactive drug” in 21 C.F.R. § 310.3(n), as well as biological products meeting the definition of “radioactive biological product” in 21 C.F.R. § 600.3(ee).
• Plasma-derived therapies are biological products derived from human whole blood or plasma.
• Fertility drugs are drugs or biological products used to treat infertility, including products approved to treat ovulatory dysfunction in women seeking pregnancy.
• Cell therapy products include cellular immunotherapies, cellular cancer vaccines, and other autologous or allogeneic cellular products approved for therapeutic use, including hematopoietic stem-cell products and adult and embryonic stem-cell products.
• Gene therapy products are biological products intended to modify or manipulate gene expression, or to alter the biological properties of living cells, for therapeutic use.
• Antibody-drug conjugates are combination products consisting of a small-molecule drug, or payload, and an antibody or antibody fragment chemically linked together.
• Medical countermeasures related to chemical, biological, radiological, and nuclear threats include drugs and biological products used to diagnose, prevent, or treat diseases or conditions caused by CBRN threat agents, including emerging infectious diseases. This category includes qualifying countermeasures, qualifying pandemic or epidemic products, and security countermeasures under the Public Health Service Act.
• Animal healthcare products include articles intended to diagnose, cure, mitigate, treat, or prevent disease in animals; articles, other than food, intended to affect the structure or function of an animal’s body; and components of such products. The definition includes veterinary pharmaceuticals intended to manage diseases, conditions, or injuries in animals, as well as biologics (vaccines, bacterins, and diagnostic products) regulated by USDA’s Center for Veterinary Biologics. It excludes devices and combination products for animals.

Please contact AGG Food & Drug chair Alan Minsk or AGG International Compliance & Risk chair Allison Raley with any questions regarding the specialty drug product exemption, the urgent U.S. health need submission process, or the potential application of the pharmaceutical Section 232 tariffs.