President Donald Trump announced Thursday that brand-name or patented pharmaceutical products will be subject to a 100% tariff starting October 1, 2025 unless the drugmaker is building a manufacturing plant in the US.

Trump has been promising for months to levy tariffs on pharmaceutical imports, which avoided tariffs during his first term.

The president sees tariffs as a way to pressure drug manufacturers to ramp up production in the US and to strengthen the supply chain for essential medicines.

Also, Trump has pointed to tariffs as a way to fulfill his vow to lower drug costs, though experts say that is unlikely to happen.

Drugmakers have taken Trump’s tariff threats seriously, unveiling hundreds of billions of dollars of commitments to build or expand US manufacturing operations in the coming years.

What Trump's $100,000 H-1B visa fee means for employers and immigrant workers

Just this week, Eli Lilly announced it would construct a $6.5 billion manufacturing facility in Houston, shortly after saying it would build a $5 billion plant outside of Richmond, Virginia.

Trump indicated in a Truth Social post Thursday what would be needed to avoid the tariffs.

“‘IS BUILDING’ will be defined as, ‘breaking ground’ and/or ‘under construction,’” Trump wrote in a Truth Social post. “There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started.”

However, it can take time to put shovels in the ground so it’s unclear whether these promises will be enough to avoid the tariffs – assuming the drug companies aren’t already in construction elsewhere in the US.

Eli Lilly said it could take up to five years for the plants to be operational and that distinction could blunt the impact of the levies.

Watch the latest edition of BizTech below: