Trump could use the findings of the probe to impose certain trade restrictions on pharma products, including tariffs.
The U.S. Department of Commerce has formally launched an investigation into the importation of pharmaceutical products and the potential national security threats posed by the global supply chain, according to a Federal Register notice on Monday.
The probe will cover “pharmaceuticals and pharmaceutical ingredients,” according to the registry notice, such as “finished drug products, medical countermeasures, critical inputs such as active pharmaceutical ingredients, and key starting materials, and derivative products of those items.”
The federal agency launched the investigation on April 1 and is seeking public comments on the matter, which should be filed within 21 days of the notice’s publication.
Analysts at Leerink Partners said Monday that the probe was “expected.” After all, President Donald Trump over the past few weeks has signaled his intent to impose tariffs on the pharma industry. “The surprise was that the Federal Register notice indicated that [the investigation] was initiated on April 1,” Leerink wrote, nearly two weeks before the notice was published.
Trump’s first tariff threat on pharma came in February, when he told industry leaders that he would slap additional duties on their products unless they relocate their manufacturing operations to the U.S.
Last week, Trump doubled down on his threats, saying that “major” pharma tariffs are coming “very shortly.” In an interview with ABC News over the weekend, Commerce Secretary Howard Lutnick said that the pharma tariffs will hit “in the next month or two.”
Analysts warn that these levies would be a blow for the industry. BMO Capital Markets in a note last week wrote that tariffs “will likely do little to shift manufacturing back to the U.S.,” especially since many major players already have “robust” biomanufacturing and fill-finish footprints in the country.
“Given the complexity of the pharma supply chain, we do not expect the industry to make any major changes,” BMO wrote. “These tariffs will only threaten public health and access to crucial treatments.”
Monday’s investigation is being carried out under Section 232 of the Trade Expansion Act of 1962, which allows the Commerce Department to look into certain imports and their effects on national security. The probe will culminate with a report to the president, within 270 days of initiation, who will then make the decision to impose certain trade restrictions, including tariffs.
In his first term, Trump used findings of Section 232 investigations to impose tariffs on copper and timber imports. He again relied on Section 232 probes to expand steel and aluminum tariffs last month.