Six days before the Section 232 pharmaceutical tariff reaches every remaining company, Commerce published the definitions, the nineteen eligible jurisdictions and the urgent health need procedure that decide which specialty medicines enter the United States at a zero rate.
WASHINGTON, September 24, 2026
The Bureau of Industry and Security published the missing half of the pharmaceutical tariff framework on Tuesday, naming for the first time the jurisdictions whose specialty medicines qualify for a zero duty rate and defining, product category by product category, what the exemptions in Proclamation 11020 actually cover.
The notice, issued by BIS’s Office of Strategic Industries and Economic Security under Docket No. 260918-0006 and published at 91 FR 60360, lands six days before September 29, the date on which the 100 percent Section 232 duty on patented pharmaceuticals extends from the companies listed in Annex III of the proclamation to every other company importing covered products.
Its practical effect is to convert a set of category labels written in April into operative customs criteria. Until Tuesday, an importer of a plasma derived therapy or an antibody drug conjugate knew that the proclamation contemplated a zero rate for its product but had no published definition of the category, no list of qualifying jurisdictions and no procedure for claiming relief on health need grounds. All three now exist.
Submissions under the new procedure are being received on an ongoing basis starting September 23, 2026, at pharma232@bis.doc.gov. Stephen Astle, Director of the Defense Industrial Base Division within the Office of Strategic Industries and Economic Security, is the designated contact.
The structure the notice completes
Proclamation 11020, issued April 2, 2026 and published at 91 FR 18183, concurred with the Secretary of Commerce’s finding that pharmaceuticals and associated pharmaceutical ingredients are being imported in such quantities and under such circumstances as to threaten to impair US national security, and imposed tariffs under Section 232 of the Trade Expansion Act of 1962.
The headline measure is a 100 percent ad valorem tariff on certain imports of patented pharmaceuticals and associated pharmaceutical ingredients, effective July 31, 2026 for the companies listed in Annex III and September 29, 2026 for all other companies. Different rates apply to products from certain jurisdictions and to companies holding onshoring agreements approved by Commerce under procedures BIS published on May 13, 2026. BIS confirms in the new notice that the Section 232 pharmaceutical tariffs do not, at this time, apply to generic pharmaceutical products and associated ingredients.
Clause 3(d) of the proclamation is the provision the new notice implements. It directs a zero ad valorem rate for a defined set of specialty categories: drugs and associated ingredients where all approved indications are designated as orphan under the Orphan Drug Act; nuclear medicines; plasma derived therapies; fertility drugs; cell therapy products; gene therapy products; antibody drug conjugates; medical countermeasures related to chemical, biological, radiological and nuclear threats; pharmaceutical products for animal health; and other specialty pharmaceutical products to be identified by the Secretary.
The zero rate is not automatic. It applies only where the Secretary, consulting the United States Trade Representative and the Secretary of Health and Human Services, determines either that the products come from a jurisdiction with a current or forthcoming trade and security framework agreement as referenced in Executive Order 14346 of September 5, 2025, or that they meet an urgent US health need.
Those two gateways are what Tuesday’s notice opens.
Nineteen jurisdictions
The list of eligible jurisdictions is the single most consequential element of the notice, because it determines relief without any company-specific application.
BIS names the following as eligible for the clause 3(d) tariff adjustment: 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. The notice adds that changes to the list may be published in a future notice.
The composition rewards reading closely. The obvious names are there: the European Union, Switzerland and Liechtenstein, Japan, Korea and the United Kingdom together account for the great majority of high-value specialty pharmaceutical manufacturing outside the United States. India’s inclusion is significant for a different reason, given its position in active pharmaceutical ingredient supply and its large presence in categories adjacent to the exempt list.
The presence of Bangladesh, Cambodia, Ecuador, El Salvador, Guatemala, Jordan, North Macedonia and Vietnam tells a story about the framework agreement architecture rather than about pharmaceutical manufacturing capacity. Eligibility here flows from having a current or forthcoming trade and security framework agreement under Executive Order 14346, not from being a major source of cell therapy or nuclear medicine. For several of these jurisdictions, the listing may prove to have little practical effect on pharmaceutical trade while carrying substantial signalling value about their standing in the broader reciprocal tariff structure.
The more instructive question is who is absent. China is not on the list. Neither is Canada. For an importer sourcing a listed specialty category from a jurisdiction outside the nineteen, the jurisdictional gateway is closed and the only remaining route to a zero rate is the urgent health need application.
The urgent health need route
The second gateway is company-specific and evidence-driven, and BIS has set out exactly what it wants.
Applications go by email to pharma232@bis.doc.gov, one product per application. Each submission has three sections.
Section 1 requires organisation information: the company’s full legal name and address, and the name, title and contact details of the authorised representative.
Section 2 requires product identification. That means the HTSUS classification at ten digits where possible; the advertised name and brand of the product or the Investigational New Drug Application number as applicable, together with the active ingredient or combination of active ingredients; an indication of which clause 3(d) category is being claimed; the country of origin and country of export for products under each HTSUS classification; the name and importer of record number of each importer; and the name and address of the manufacturer.
Section 3 is the substantive case. BIS asks for the rationale explaining why the import meets an urgent US health need, and suggests the kinds of evidence it expects: the type of disease the product treats, an assessment of alternative therapies or the absence of them, the number of US patients using the product, and whether the product is available in other jurisdictions.
BIS specifies that requests should only be made for patented pharmaceutical products and associated ingredients covered by the HTSUS codes listed in Annex I of the proclamation.
The review process is deliberately individualised. Commerce may request supplemental documentation, will consult USTR and HHS, and will make an individual, fact-specific, company-specific decision on each request. Companies are notified in writing. Relevant information is then transmitted to CBP, which administers the tariff adjustment at entry summary filing and may request additional documentation to validate entries.
BIS commits to protecting confidential, trade secret and proprietary information to the fullest extent allowed by law, citing the Trade Secrets Act at 18 U.S.C. 1905 and Exemptions 3 and 4 of the Freedom of Information Act, and undertakes to limit dissemination to those within Commerce, USTR and other executive branch agencies with a need to know.
The agency is candid about the timing pressure driving all of this. In its Paperwork Reduction Act discussion, BIS states that it could not reasonably comply with normal clearance procedures because delay would impede companies’ ability to request approval, and that it needs time to receive and evaluate urgent health need requests before September 29.
Five corrections that change scope
Buried behind the definitions are six technical corrections that will matter more to classification teams than anything else in the notice: five to Annex I and one to Annex IV.
The first amends the definition of “generic pharmaceutical articles” in subdivision (c)(iii) with respect to heading 9903.04.67, modifying it to specifically include unpatented animal health products. That is a meaningful clarification for the veterinary sector, which had been operating without certainty about whether unpatented animal health products sat inside the generic carve-out.
The second creates a new Chapter 99 heading carrying a zero ad valorem rate, to be used for pharmaceutical products and associated ingredients imported under the HTSUS classifications listed in subpart (c) of US note 40 that are solely intended for clinical trials, research and development, or other non-commercial applications. This is a substantial relief for the research pipeline. A 100 percent duty applied to clinical trial material would have raised the cost of running US trials on foreign-manufactured candidates in a way that no one appeared to have intended.
The third amends the definition of “pharmaceutical articles” in subdivision (c)(i) to clarify that it encompasses only finished pharmaceutical products, their active pharmaceutical ingredients, and the key starting materials of those APIs.
The fourth amends subdivision (i) with respect to heading 9903.04.69, clarifying that the provision covers any pharmaceutical or non-pharmaceutical articles imported under an HTSUS classification listed in subpart (c) of US note 40 that are not finished pharmaceutical products, their APIs, or the key starting materials of those APIs.
Read together, the third and fourth corrections draw a sharper boundary around what the tariff reaches. Goods that fall under a covered HTSUS classification but are not finished product, API or key starting material are routed to a separate heading rather than swept into the 100 percent rate.
The fifth incorporates HTSUS changes made by the Committee for the Statistical Annotation of Tariff Schedules on July 1, 2026, an interagency body drawing on the International Trade Commission, CBP and the Census Bureau.
The Annex IV correction resolves an overlap. Five HTSUS codes that appeared in both Annex IV and Annex I are removed from Annex IV: 2937.23.50, 3002.13.00, 3002.14.00, 3002.15.00 and 3004.49.00. Any importer who had relied on Annex IV treatment for goods under those codes needs to revisit that position immediately, because the codes now sit on the duty-bearing side of the line.
Economic impact analysis
The zero-rate architecture disclosed this week is best understood as an attempt to hold the national security rationale of the tariff together with the political impossibility of causing medicine shortages.
The categories granted zero-rate treatment are, almost without exception, categories in which substitution is impossible and the consequences of unavailability are immediate. Orphan drugs serve populations with no alternative by definition. Nuclear medicines have half-lives measured in hours and cannot be stockpiled. Plasma derived therapies depend on collection and fractionation infrastructure that cannot be relocated. Cell and gene therapies are frequently patient-specific. Medical countermeasures for CBRN threats exist precisely for low-probability high-consequence events.
Applying a 100 percent duty to these products would not have onshored their production. It would have raised prices in markets where demand does not respond to price, or created gaps in supply.
By conditioning the zero rate on jurisdiction or health need rather than granting it categorically, the administration retains leverage. The jurisdictional list is explicitly revisable, and it is tied to the same framework agreement structure that governs reciprocal tariffs generally. A country’s access to zero-rate treatment for its specialty pharmaceutical exports is now, in a formal sense, a function of its broader trade and security relationship with Washington.
That is an efficient piece of policy design from the administration’s perspective and an uncomfortable one from a supply chain perspective. It means that the tariff treatment of a life-saving therapy can change because of a development in an unrelated negotiation.
For companies, the distributional consequences turn on geography. A manufacturer producing an antibody drug conjugate in Switzerland or an orphan biologic in Ireland has its relief delivered automatically by jurisdiction. A manufacturer producing the same category of product in a jurisdiction outside the nineteen faces a 100 percent duty unless it can build and win an urgent health need case, product by product, with no published timetable for decision.
The volume of applications BIS will receive in the coming weeks is likely to be substantial, and its capacity to process them individually, in consultation with two other agencies, is finite. Companies filing late in the queue should plan on paying duty while they wait.
What this means for importers and US businesses
The immediate task for any importer of specialty pharmaceuticals is a two-column assessment: category and jurisdiction.
If the product falls into one of the clause 3(d) categories and originates in one of the nineteen listed jurisdictions, relief should be available through the jurisdictional gateway, and the priority is ensuring that entry documentation supports the claim and that CBP can validate it at entry summary.
If the product falls into a clause 3(d) category but originates elsewhere, the urgent health need application is the only route, and it should be filed now rather than after September 29. BIS has said it needs time to evaluate requests before that date, which is a clear signal that submissions arriving afterwards will be processed against a running clock on which duty is accruing.
If the product does not fall into a clause 3(d) category at all, this notice offers nothing and the analysis reverts to the country tiers, the onshoring pathway and the MFN pricing pathway established by the proclamation.
Classification teams have specific work to do regardless. The five Annex I corrections and the Annex IV deletion change the operative text. Any classification determination made before September 23 against the previous annex language should be re-validated, with particular attention to the removed Annex IV codes, to clinical trial and research material that may now qualify for the new zero-rate heading, and to unpatented animal health products that now sit expressly within the generic definition.
Companies running clinical programmes should move quickly on the research and development heading. Material imported for trials, R&D or other non-commercial applications under a covered classification now has a zero-rate pathway that did not clearly exist before, and capturing it requires using the new heading rather than the one previously applied.
Documentation discipline extends past entry. CBP administers the adjustment at entry summary and may request additional documentation to validate entries, which means the evidentiary file supporting a category claim or an approval letter needs to be retrievable long after the goods have cleared.
US businesses outside the pharmaceutical sector have a narrower but real interest. Hospital systems, specialty pharmacies, group purchasing organisations and self-insured employers all sit downstream of these decisions. A therapy that secures zero-rate treatment holds its price. One that does not may not.
What remains unresolved
Three things are still open.
The Secretary retains authority to identify additional specialty pharmaceutical products beyond those enumerated in clause 3(d). Companies with products that plausibly belong in the exempt set but are not currently named have an argument to make and a Federal Register to watch.
The jurisdictional list is expressly subject to change by future notice, in either direction. Nothing in Tuesday’s publication suggests that a listing is permanent.
And the generics question remains the largest open item in the entire framework. BIS states only that the tariffs do not apply to generic pharmaceutical products “at this time,” language that echoes the proclamation’s direction that Commerce advise the President within one year on whether circumstances warrant extending Section 232 tariffs to generics. That advice is due by early April 2027.
For now, the framework has its missing pieces. Whether it has enough of them to get through Monday without a shortage is the question that will be answered next week.
Reading the definitions
The definitions BIS published are drawn from consultation with the Food and Drug Administration and the Department of Agriculture’s Center for Veterinary Biologics, and the agency states they apply solely for purposes of determining zero-rate eligibility under Proclamation 11020 and should not be construed as binding guidance for any other purpose. Commerce reserves the right to modify them. Importantly, they cover imports of investigational drugs as well as FDA-approved or FDA-authorised drugs.
Several of the definitions are narrower than the shorthand labels suggest, and importers should read them rather than the category names.
The orphan definition requires that a drug or biological product be designated under Section 526 of the Federal Food, Drug, and Cosmetic Act for one or more rare diseases or conditions, and that all approved indications under Section 505 of that Act or licensed under Section 351 of the Public Health Service Act be for one or more such rare diseases. A product with an orphan designation that also carries a non-orphan approved indication does not qualify. That distinction will exclude a meaningful number of products that companies may have assumed were covered.
Nuclear medicine is defined by reference to the regulatory definitions of radioactive drug at 21 CFR 310.3(n) and radioactive biological product at 21 CFR 600.3(ee), which sweep in non-radioactive reagent kits and nuclide generators intended for use in preparing such substances while excluding carbon-containing compounds and potassium salts carrying trace natural radionuclides.
Plasma derived therapy is defined as a biological product derived from human whole blood or plasma, by reference to 42 U.S.C. 1320f-1(e)(3)(C). Fertility drug covers products for the treatment of infertility, including drugs approved for ovulatory dysfunction in women desiring pregnancy.
Cell therapy product covers cellular immunotherapies, cellular cancer vaccines and other autologous or allogeneic cellular products approved for one or more therapeutic indications, including hematopoietic stem cell products and adult and embryonic stem cell products. Gene therapy product covers biological products intended to modify or manipulate gene expression or alter the biological properties of living cells for therapeutic use.
Antibody drug conjugates are defined as combination products composed of a small-molecule payload and an antibody or antibody fragment joined by a chemical linker. That is a structural definition rather than a therapeutic one, and it will control classification arguments at the margin.
For an importer, the practical implication is that the eligibility question is not “is my product a cell therapy” in the colloquial sense but whether it meets the regulatory construction BIS has adopted. Where the answer is close, the file supporting the position should be built before entry rather than after a CBP request for validation.