New Trans-Atlantic Drug Pricing Deal: What Supply Chain Stakeholders Must Know
In a major development for the global life-sciences landscape, the United States and the United Kingdom have reached an agreement in principle that reshapes how both countries approach pharmaceutical pricing and cross-border trade.
In a major development for the global life-sciences landscape, the United States and the United Kingdom have reached an agreement in principle that reshapes how both countries approach pharmaceutical pricing and cross-border trade.
Under the agreement, the U.K. will raise the net price of new medicines by 25%, reversing years of downward pressure that had strained returns on innovative therapies. The government will also ease the financial burden of its VPAG rebate structure, capping repayment levels and committing to maintain rebate rates at or below approximately 15% starting in 2026. These changes reflect a broader acknowledgment that sustaining innovation requires restoring reasonable margins across the branded pharmaceutical marketplace.
In exchange, the United States will exempt U.K.-origin pharmaceuticals, active ingredients, and medical technologies from current and prospective Section 232 tariffs. This concession reduces supply-chain volatility and removes a major source of uncertainty for U.S. companies sourcing components or finished products from the U.K. It also signals a more cooperative posture between two major life-sciences hubs as they seek to reinforce global competitiveness.
For 2026, this agreement provides both opportunity and complexity. Companies should monitor how implementation unfolds and assess how pricing, market access, and supply-chain exposure may shift.
If you are a pharmaceutical supply-chain stakeholder seeking help assessing potential risks or developing a 2026 strategy, contact Lanton Strategies today. Our team can guide you through the policy, regulatory, and market implications of this evolving landscape.
Trump’s Pharmaceutical Tariffs: A New Operating Era for Healthcare
The Trump administration's recent trade and healthcare policies are poised to introduce significant uncertainty into the U.S. healthcare industry. Two pivotal executive actions—the initiation of a Section 232 national security investigation into pharmaceutical imports and the signing of the executive order titled “Lowering Drug Prices by Once Again Putting Americans First”—highlight the administration's approach.
The Trump administration's recent trade and healthcare policies are poised to introduce significant uncertainty into the U.S. healthcare industry. Two pivotal executive actions—the initiation of a Section 232 national security investigation into pharmaceutical imports and the signing of the executive order titled “Lowering Drug Prices by Once Again Putting Americans First”—highlight the administration's approach.
On April 1, 2025, the Department of Commerce commenced a Section 232 investigation to assess the national security implications of importing pharmaceuticals and their ingredients. This encompasses finished drug products, active pharmaceutical ingredients (APIs), and key starting materials. The investigation aims to determine whether reliance on foreign sources compromises national security, potentially leading to the imposition of tariffs ranging from 10% to 25% on these imports.
Simultaneously, President Trump signed the executive order “Lowering Drug Prices by Once Again Putting Americans First” on April 15, 2025. This order seeks to reduce prescription drug costs by enhancing Medicare drug price negotiations, reinstating discounted insulin programs, and increasing transparency in hospital drug acquisition costs.
While these measures aim to bolster domestic manufacturing and reduce drug prices, they introduce several uncertainties:
Supply Chain Disruptions: Tariffs on imported pharmaceuticals could disrupt existing supply chains, leading to potential shortages and increased costs for healthcare providers and patients.
Regulatory Ambiguity: The executive order lacks detailed implementation plans, leaving stakeholders uncertain about how the policies will be enforced and their practical implications.
Market Volatility: The potential for tariffs and changes in drug pricing regulations may lead to market instability, affecting investment decisions within the pharmaceutical industry.
In this evolving landscape, healthcare entities must navigate the complexities of new trade policies and regulatory reforms. Lanton Law offers expertise in crafting targeted messaging and engaging with policymakers to advocate for client interests. Our team is equipped to assist clients in understanding and responding to these changes effectively. Contact us to learn more.
Section 232 Targets Drug Imports: What It Means for Pharma and Healthcare
On April 1, 2025, the U.S. Department of Commerce initiated a Section 232 national security investigation into the importation of pharmaceuticals and pharmaceutical ingredients. This inquiry aims to assess whether the reliance on foreign sources for essential medical products poses a threat to national security. The scope includes finished drug products, active pharmaceutical ingredients (APIs), key starting materials, and related derivatives.
On April 1, 2025, the U.S. Department of Commerce initiated a Section 232 national security investigation into the importation of pharmaceuticals and pharmaceutical ingredients. This inquiry aims to assess whether the reliance on foreign sources for essential medical products poses a threat to national security. The scope includes finished drug products, active pharmaceutical ingredients (APIs), key starting materials, and related derivatives.
The Department of Commerce is soliciting public comments to inform this investigation. Stakeholders are encouraged to provide input on various factors, including:
The current and projected demand for pharmaceuticals and their ingredients in the U.S.
The capacity of domestic production to meet this demand.
The role and risks associated with foreign supply chains.
The impact of foreign government subsidies and trade practices on U.S. industry competitiveness.
The feasibility of expanding domestic manufacturing to reduce import reliance.
Comments must be submitted by May 7, 2025, through the Federal Rulemaking Portal at www.regulations.gov, referencing Docket ID BIS-2025-0022. Submissions containing business confidential information should be clearly marked and accompanied by a non-confidential version.
For further details, please refer to the official notice in the Federal Register: Notice of Request for Public Comments on Section 232 National Security Investigation of Imports of Pharmaceuticals and Pharmaceutical Ingredients.
There are plenty of questions and speculation about what this means for specific supply chain participants. Contact Lanton Strategies to learn about how we can help you respond to these comments as well as help you speak with either Congress or the Administration to get your voice heard.