SPECIAL REPORT: Trump’s 100% tariff on patented drugs spares Europe and ignores Canada

A pill bottle at the border

Tuesday, one minute past midnight

Since 12:01 a.m. this Tuesday, September 29, a 100% duty has hit patented drugs imported into the United States by manufacturers that have reached no agreement with Washington.

One hundred percent. The price of the product, a second time. At customs.

The text imposing it is a proclamation by Donald Trump. The word Canada does not appear in it.

What the hand holds

A bottle of pills weighs a few grams. You shake it. It makes a small, dry rattle. You hand it over at the counter. You wait for your change.

The bottle doesn’t say where the molecule was made. It doesn’t say who holds the patent. It doesn’t say which agreement covers it.

Since this morning, those three questions set its price at the U.S. border.

That bottle is the one you take every morning, or every week, sometimes for years.

The bottle knows nothing. This morning, all the same, it carries a tariff.

A light bottle now carries a heavy question.

One hundred, fifteen, twenty, zero

The April 2 schedule

The proclamation is dated April 2, 2026. It sets the default duty at 100% on patented drugs and their ingredients.

The text is long. The schedule fits in a few numbers.

Then it opens doors. One at a time.

The rate drops to 15% for the European Union, Japan, South Korea, Switzerland and Liechtenstein. The rate drops to 10% for the United Kingdom, in the April text. The rate drops to 20% for a company whose onshoring plan is approved by the commerce secretary.

The rate drops to zero for a company that adds a so-called most-favored-nation pricing agreement. The rate drops to zero for orphan drugs, nuclear medicine, and cell and gene therapies.

Generics, set apart

Generics and biosimilars are not covered. Not “at this time,” the text specifies.

The United Kingdom would no longer be subject to the duty at all, CNN reports.

One hundred. Fifteen. Ten. Twenty. Zero. For Canada, the schedule reads fast.

Six doors. Six names. None of them ours.

A hundred by default, and discounts for those with a line.

From April 2 to September 29

July 31, seventeen names

Clause (4) of the proclamation sets two dates. Not one more.

On July 31, the duty applied to the companies named in Annex III. There are 17 of them, according to the Trade Commissioner Service of Canada.

On September 29, it applies to all the others. For them, September arrived on schedule.

First the big ones. Then everyone. The second wave singles no one out.

September 23, a technical notice

Six days before the deadline, the Bureau of Industry and Security published a notice of technical corrections in the Federal Register. It too takes effect on September 29.

It repeats the generics rule. For now, the Section 232 pharmaceutical duties do not apply to them.

Six months between signature and deadline. Time to negotiate. For those who had a seat at the table.

The calendar was no secret. It had been in writing since April.

Six months’ notice, for anyone with someone to call.

A line for Europe

The missing word

The text doesn’t name Canada. The text doesn’t name Mexico. The text doesn’t name the Canada–United States–Mexico Agreement.

It names Europe. It names Japan, Korea, Switzerland, Liechtenstein. It names the United Kingdom.

Europe has its line. Canada, none.

Japan has its own. So does Korea. So does Switzerland.

Neighbor, ally, partner in the agreement. Three titles. No line.

No CUSMA exemption

The Trade Commissioner Service of Canada says it bluntly in its FAQ, updated on August 27: there is no exemption for CUSMA-compliant goods.

For some other Section 232 categories, goods that comply with the agreement get partial exemptions, according to the same page. For patented drugs, nothing.

Nothing. Not a note. Not a cross-reference.

Which is this report’s point: the 100% serves first to extract pricing agreements, and it leaves the closest ally without a line of its own.

The next-door neighbor, treated like a stranger.

The same Tuesday

Two texts, one hour

September 29 is not just the date for drugs.

At the same time, 12:01 a.m., bans took effect on imports of certain alcohol products, dairy byproducts, molasses and motorcycles from Canada, under another White House proclamation, signed on September 8.

Two texts. One hour. The same neighbor.

Punish, negotiate

The two texts don’t follow the same logic. The first punishes. The second negotiates prices.

They do share one trait. Neither protects CUSMA-compliant goods. On the bans, Beer Canada told Global News as much on Monday.

A Canadian exporter could thus read two notices this Tuesday morning. One closes a door. The other sets an entry price.

For a company that makes both drugs and something else, the day starts with two readings.

The treaty appears in neither.

Two proclamations, one neighbor, no treaty.

Ten billion heading south

Ottawa’s profile

Innovation, Science and Economic Development Canada keeps a profile of the pharmaceutical sector. Its latest update is dated July 23.

In 2025, Canada exported about $14.5 billion worth of pharmaceutical products. The United States took 70.4%. That is about 10.2 billion.

Seven dollars out of ten. A single customer. More than two-thirds of our drug sales abroad.

The unknown share

How much of that ten billion is patented drugs made by companies with no agreement? None of the documents consulted puts a number on it.

Part of it is generic, so spared. Part comes from multinationals covered by an agreement. The rest…

The rest has no number. It has addresses.

Nor does the profile say how many jobs depend on patented sales to the south.

The federal government publishes a profile. It does not publish, at least not in that profile, the exposed share.

Ten billion exposed, and no one counting the share that gets hit.

Toronto, Montreal, Vancouver

Thirty-five thousand seven hundred

Pharmaceutical manufacturing employed about 35,700 people in Canada in 2025, according to the same profile. Over five years, employment grew by about 9.8%.

The sector is concentrated mainly in the Toronto, Montreal and Vancouver regions.

Three cities. Labs. Filling lines. Clean rooms.

Nearly 10% growth in five years. A sector that was growing.

Gowns and gloves

In a clean room, you go in wearing a gown, a cap, shoe covers. The nitrile gloves stick a little to your fingers. The hum of the machines is steady, almost soft.

Nobody in there negotiates with the commerce secretary.

They fill bottles. They check batches. They sign control sheets.

The 100% duty doesn’t target those gestures. It targets the address where they happen.

A clean room with no flag, an invoice with an address.

Twenty-six agreements

August 31

As of August 31, 26 manufacturers had signed a most-favored-nation pricing agreement with Washington, according to Life Science Daily News. They accounted for about 89% of the brand-name drug market.

The big companies that signed are exempt from the duty, CNN confirms.

Twenty-six signatures. Nearly nine-tenths of the brand-name market.

The word agreement, here, means price.

The stick and the price

The 100% is there to get signatures. The 100% is there to push American prices down. The 100% is there to get plants built down south.

It hits few companies. It has already convinced almost all of them.

It is a tariff that succeeds when nobody pays it.

And yet some have not signed. They are not the richest.

The stick spoke. The big ones signed. The small ones pay.

The Canadian price as a yardstick

Most favored nation

What does most favored nation mean when it comes to drugs?

The American target is the lowest price paid in an OECD country whose GDP per capita is at least 60% of that of the United States, lawyers Kristin E. Wall and Sarah Pennington, of the firm Norton Rose Fulbright, explained in January.

The GENEROUS model, announced in November 2025, uses eight comparison countries. Canada is one of them, according to their analysis.

The Canadian bottle

The bottle sold in Montreal thus becomes a yardstick for the bottle sold in Chicago. The price paid here becomes a data point in a calculation made elsewhere.

The Patented Medicine Prices Review Board removed the United States from its comparison list as of January 1, 2026, the same lawyers note. Washington, meanwhile, looks at our prices.

The Board now compares our prices with those of 11 countries, including France, Germany, Japan and the United Kingdom, according to Norton Rose Fulbright.

Two policies. One bottle. Two opposite directions.

American policy pushes Canadian prices up. Canadian policy pushes them down. That is their summary.

A low price in Canada becomes an argument in Washington. It could also become, for a manufacturer, a reason to delay a launch here.

Our pharmacy price has become a chip in their bargaining.

More than 100 manufacturers

The Brookings analysis

More than 100 manufacturers make at least one drug that is not exempt, according to a preliminary analysis by Marta Wosinska of the Brookings Institution, cited by CNN.

Most have no plant. They have their drugs made by contract manufacturers.

And competition for contract manufacturing capacity in the United States has reached an outsized level, she says.

No plant. No room at the contractors. No agreement.

A big drugmaker negotiates at the White House. A small one negotiates with its bank.

Shallower pockets

Their pockets aren’t as deep, Wosinska says of the smaller companies. Many may have no choice but to sell themselves to bigger ones, CNN reports.

There is the patient whose disease doesn’t interest the big drugmakers. There is the small manufacturer who spent years on one molecule. There is the contractor with no room left on its lines.

Patients whose conditions are not treated by the big manufacturers could feel the hardest blow, CNN writes.

A molecule still under patent has no generic to replace it. When it runs short, it runs short.

These are not multinationals. These are prescriptions.

The giants spared. The market’s orphans targeted.

Generics, for now

The text’s caution

The proclamation deserves credit for what it does well.

It spares generics and biosimilars. It spares orphan drugs. It spares cell and gene therapies, nuclear medicine, fertility treatments.

In Canada, generics accounted for 79.4% of prescriptions in 2024, according to the federal profile. They are not what the tariff targets.

Three worrying words

Not hitting generics means not touching the most common pill. It is a responsible choice. I call it that.

But the text says “at this time.” The September 23 notice repeats the same caveat.

That is the reasonable half of the text.

Three words. Enough to keep an industry holding its breath.

Generics spared today, not promised for tomorrow.

Fifty-three percent

America’s dependence

Washington’s motive deserves to be taken seriously.

In 2025, 53% of patented drugs distributed in the United States were made abroad, according to FDA figures cited by Life Science Daily News.

Only 15% of patented active ingredients, by volume, were produced on American soil, according to the same source.

More than half elsewhere. Less than a sixth at home.

The right move, and its limit

Bringing the manufacture of critical drugs home reduces a real dependence. A closer supply chain holds up better in a crisis. It is a good move for the security of the West.

And yet the West is not just the Midwest. A plant in Montreal is also sheltered from a crisis in the Pacific.

I share the motive. I don’t share its map.

The text makes no such distinction. It treats the neighbor like a faraway island.

Bring it home, yes. But the shared house had two floors.

Twenty percent, then a hundred

April 2, 2030

The 20% rate granted to onshoring plans is not permanent. It goes back up to 100% on April 2, 2030, according to the proclamation.

The exemption for companies that signed a pricing agreement runs until January 20, 2029. That is the day of the next presidential inauguration.

Two dates. One pushes companies to build. The other coincides with the end of the term.

A production line doesn’t move in a month. It moves in years. The 2029 and 2030 calendar leaves exactly that much time.

After 2030, the onshoring discount disappears. What remains, on paper, is only the pricing agreement.

A Canadian plant

A Canadian plant can carry on, if its owner has signed. A Canadian plant can wait, if its products are generic. A Canadian plant can also lose a line to an American site, if the math calls for it.

No document consulted announces any such departure. The mechanism, though, is written down.

The proclamation doesn’t need to close a plant in Canada. It just makes the other address cheaper.

No closure in writing. An invoice shifted north.

The bill, according to BIO

American industry itself

The opposition doesn’t come only from Canada. Even in Washington, the tariff has opponents.

Tariffs on drugs will raise costs, impede domestic manufacturing and divert resources away from research, said John Crowley, president of the American biotechnology organization BIO, according to CNN.

The American biotech lobby, against its own president’s tariff. That detail says something.

Crowley isn’t defending Canada. He is defending American research. The two interests cross here.

What a patient pays

A customs duty is paid at import. Then it moves up the chain. It ends up on a bill, somewhere.

For a niche drug, the bill lands with an insurer. With a hospital. With a family.

At the counter, nobody talks about Section 232. People talk about deductibles. Coverage. Whether a generic is available, or not.

Patients could see fewer drugs available and higher prices, the critics cited by CNN warn.

And yet the tariff is presented as a security measure. Whose security, exactly?

A security measure you pay for at the pharmacy counter.

Not one line for us

The bottle, this morning

This morning, the bottle didn’t change weight. It changed status.

Made here by a company with no agreement, it pays a hundred. Made in Europe, fifteen. Nothing, if it is generic or covered by a negotiated price.

Its price in Canada, meanwhile, serves as a yardstick in Washington.

I’ll admit a simple worry. I don’t know what the bottle I hand over at the counter will cost in two years. Nobody, this morning, can tell me.

What we agree to lend

Will we let our pharmacy prices serve as a benchmark for Washington without demanding, in return, the line Europe obtained?

The proclamation doesn’t raise that issue. It was written without us.

The next version could be written with us. Provided we ask.

Fifteen for Europe, a hundred by default, and not one line for us.

Sources:

Primary Sources:

• The White House — proclamation on patented drugs, rates and the September 29 deadline, April 2, 2026
• Trade Commissioner Service of Canada — no CUSMA exemption for patented drugs, August 27, 2026
• Innovation, Science and Economic Development Canada — pharmaceutical industry profile, 2025 exports, July 23, 2026

Secondary Sources:

• CNN via KVIA — more than 100 manufacturers exposed, according to Brookings, September 29, 2026
• Life Science Daily News — 26 pricing agreements and import dependence, September 9, 2026
• Norton Rose Fulbright — Canada among the reference countries for U.S. prices, January 2026