The U.S. Has A New Vice To Squeeze Foreign Imports: Pharma Quality

By John W. Claud and Mark I. Schwartz, Hyman, Phelps, & McNamara

Over the past year, FDA has placed pressure on foreign drugmakers to bring their manufacturing to U.S. Recently, FDA Commissioner Marty Makary posted his top 10 accomplishments, and promoting domestic production was among them.

This followed similar remarks at the 2026 J.P. Morgan Healthcare Conference, stating that 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, in this case, is using foreign manufacturing 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 in the FDA Law Blog. FDA has also initiated the 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.’ “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 active pharmaceutical ingredients (APIs) 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 gives the president broad 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, as well as their raw ingredients, which aligned with Commissioner Makary’s stance. The final report on its investigation isn’t public yet, but Commerce boasted in January that it used Section 232 tariffs [three-year waivers from those tariffs for manufacturers, specifically] to ensure “multi-billion dollar investments in U.S.-based manufacturing and reshoring.” The administration announced 100% tariffs on the pharmaceutical industry in September 2025. These have not been implemented yet, and recent deals to avoid them have included manufacturer guarantees to bring more production to U.S. sites.

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 there 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 have been 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 APIs. One generic drug CEO took the opportunity to decry what he believed were 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 to encourage onshoring on the basis of quality, trade fairness, or national security — or by combining all three.

A version of this article was published first on the FDA Law Blog. It is republished here with permission.

About The Authors:

John W.M. Claud is a counsel with the firm Hyman, Phelps & McNamara P.C. and counsels FDA-regulated entities on litigation, enforcement, and compliance matters including FDA inspections, Form 483s, warning and untitled letters and consent decrees, and internal investigations Before joining the firm, he served as an assistant director of the U.S. Department of Justice’s Consumer Protection Branch. He began his career as an assistant district attorney in Manhattan. He is a frequent public speaker on matters of government enforcement strategies under the FDCA and corporate compliance best practices.

Mark Schwartz is a director at Hyman, Phelps & McNamara and a former regulator who served as deputy office director in FDA CBER’s Office of Compliance and Biologics Quality. Before CBER, he served in counselor roles for CBER and CDER while in FDA’s Office of Chief Counsel. At HPM, he advises clients on issues related to drugs, biologics, and medical device compliance. He received law degrees from Duke University School of Law and the Université de Sherbrooke. He has been an adjunct professor at George Mason University and Howard University law schools.