A Quality Tax for Foreign Drug Makers? The Links Between National Security, Trade Deals, and Drug Quality.

Over the past year, FDA has placed pressure on foreign drugmakers to bring their manufacturing into the U.S. FDA Commissioner Marty Makary posted his Top 10 accomplishments recently, and promoting domestic production was among them. This followed similar remarks at the 2026 J.P. Morgan Healthcare Conference. FDA’s regulatory policies here are in service of a merger of drug quality, international trade, and national security to address concerns that foreign drug manufacturing poses threats to American consumers.

FDA is using foreign manufacture as a proxy for lower quality standards. An initiative to increase surprise foreign inspections is meant to “level the playing field” for domestic manufacturers. The Agency posited in its May announcement that even with advanced warning, inspections at foreign firms reveal “serious deficiencies more than twice as often than during domestic inspections.” We’ve discussed the practical difficulties of this initiative here. FDA has also initiated a PreCheck Program with goals of “increasing regulatory predictability, facilitating the construction of manufacturing sites in the U.S., and streamlining aspects of pharmaceutical manufacturing facility assessments in advance of a specific product application..”

From a national security perspective, Makary has said that the U.S.’s “overreliance on foreign drug manufacturing has created national security risks.” Makary’s not wrong that the potential exists for China or even India to choke off supply of crucial API and other drug components for critical medications like antibiotics. And using quality as a filter to decide which partners to trade with makes sense. But when the administration merges national security, drug quality, and trade, foreign manufacturers that aren’t included in trade deals are under the threat of paying a “quality tax” through tariffs, based on the presumption that foreign products inherently bear more risks than those made domestically.

While FDA doesn’t specifically use tariffs to push onshoring, it has a role in the administration’s push to do so. Section 232 of the Trade Expansion Act of 1962 broadly gives the President the power to limit imports that threaten national security. The section allows for action based on the “circumstances” of importation, and that language gives the administration latitude to define national security broadly, including arguing that alleged offshore quality deficiencies themselves constitute a security threat. FDA’s role is providing the regulatory predicate that supports that national security argument.

From there, the President can then invoke tariffs on imports or set limits on how much of the product at issue can enter the country. On April 1, 2025, the Department of Commerce launched a Section 232 investigation into the pharmaceutical industry that covered finished branded and generic medicines and their raw ingredients, which aligned with Commissioner Makary’s stance. The final report on its investigation isn’t public yet, but earlier this week Commerce boasted that it used Section 232 tariffs to leverage its trade deal that ensure “multi-billion dollar investments in U.S.-based manufacturing and reshoring.” The administration announced 100 percent tariffs on the pharmaceutical industry in September 2025. These have not been implemented yet, and recent deals to avoid them have included guarantees to bring more manufacturing to U.S. sites.

And it’s important to note that Section 232 tariffs are different from those at issue in the much-publicized case before the U.S. Supreme Court. The tariffs at issue are under the International Economic Emergency Powers Act (IEEPA). If the Court overturns the “emergency” tariffs under IEEPA, Section 232 levies would survive as they are issued under a different statute, have been congressionally delegated, and judicially affirmed.

The links between domestic production, national security, and manufacturing quality were also on display at a November hearing before the Senate Special Committee on Aging. Witnesses there testified about the potential impacts of Section 232 tariffs on foreign-made generic drugs and active pharmaceutical ingredients (APIs). One generic drug CEO took the opportunity to decry what he believed was lower quality standards in the absence of surprise foreign inspections and other regulatory oversight.

It seems as though FDA is intent to justify its pressure on foreign drugmakers and encourage onshoring, on the basis of either quality, trade fairness, or national security, or by combining all three.