Trump’s new 100 percent tariffs on patented pharmaceuticals, signed by executive order on April 2, are drawing close attention from Spartanburg’s manufacturing and healthcare sectors, as companies and hospitals assess what the policy shift could mean for supply chains and drug costs.
President Donald Trump imposed the tariffs under Section 232 of the Trade Expansion Act of 1962, citing national security and the need to reduce U.S. dependence on foreign drug manufacturing. The tariffs apply to patented pharmaceuticals and their active ingredients. Generic drugs and biosimilars are not subject to the tariffs at this time. The White House said the decision would be reassessed in one year.
For companies that enter into onshoring agreements with the Department of Commerce and Most Favored Nation pricing agreements with the Department of Health and Human Services, the tariff rate drops to zero percent through January 20, 2029. Companies that only enter into onshoring agreements face a 20 percent tariff. Full implementation is set for 120 to 180 days after the order.
Spartanburg Regional Healthcare System, one of the county’s largest employers and a major pharmaceutical consumer, will face higher costs if drug makers pass tariff expenses down the supply chain. Spartanburg Regional operates a network of hospitals, outpatient centers, and pharmacies across the Upstate that collectively dispense thousands of prescription drugs daily.
The tariff policy lands as Spartanburg County’s broader economy navigates a softer patch. According to a TD Economics 2026 state forecast, South Carolina’s economy entered slower growth in late 2025 as the state shed jobs across trade-exposed segments including logistics and manufacturing, though a GDP growth rate of 2.5 percent is projected for 2026, one of the stronger performances in the Southeast.
Spartanburg County’s major pharmaceutical buyers include Spartanburg Regional, Mary Black Memorial Hospital, Prisma Health Upstate, and the county’s pharmacy networks. Analysts tracking the pharmaceutical sector noted that many drug companies front-loaded production and stockpiled inventory in anticipation of tariff announcements, with global pharmaceutical manufacturing output surging 9.1 percent in 2025 according to a January 2026 Atradius report.
The Council on Foreign Relations noted that pledged pharmaceutical onshoring investments, if fully realized, could create tens of thousands of new manufacturing jobs in the United States. South Carolina has positioned itself as a target for pharmaceutical and life sciences investment in recent years, and state economic development officials are expected to pursue onshoring opportunities tied to the new tariff framework.
For Spartanburg employers and workers in the county’s large healthcare sector, the key near-term question is whether drug makers will absorb tariff costs or pass them through to hospitals and patients. The 120-day implementation window gives the industry time to negotiate pricing agreements and onshoring commitments before the full tariff rate takes effect.
What’s Happening
Q: What did President Trump do with pharmaceutical tariffs?
A: President Trump signed an executive order on April 2 imposing 100 percent tariffs on patented pharmaceutical products and ingredients, citing national security concerns and the goal of bringing drug manufacturing back to the United States.
Q: How does this affect Spartanburg?
A: Spartanburg Regional Healthcare System and other county medical facilities are major consumers of pharmaceuticals, meaning higher drug costs could affect hospital operating budgets and patient prescription costs depending on how drug makers respond.
Q: Are there any exceptions to the tariffs?
A: Generic pharmaceutical products, biosimilars, and their ingredients are not subject to tariffs at this time. Companies entering onshoring agreements with the Department of Commerce face a reduced 20 percent tariff, and those also entering Most Favored Nation pricing agreements with HHS qualify for a zero percent rate.
Q: When do the tariffs take effect?
A: The tariffs are set to take effect in 120 days for large companies and 180 days for smaller companies, giving the industry time to negotiate pricing and onshoring agreements before full implementation.
Q: What does this mean for South Carolina’s economy?
A: South Carolina has attracted significant pharmaceutical and life sciences investment in recent years. State economic development officials are expected to pursue onshoring opportunities tied to the new tariff framework, which could create new manufacturing jobs in the Upstate region.
