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Government and regulatory partner Mollie Sitkowski discussed a bill that’s been introduced aimed at addressing a loophole that allows pharmaceutical companies to potentially lower tariff costs with Endpoints News.
The article noted that the loophole, referred to as the “first sale rule,” allows companies to reduce the value of pharmaceutical products declared at US customs, substantially lowering the tariff duty the company would be required to pay. The bill addressing the loophole would require importers to pay duties based on the actual commercial value of the product.
Sitkowski noted that the first sale rule is “one of the few legal ways” for importers to mitigate costs associated with tariffs, as the Trump administration could “unilaterally change the duty rates on countries.”
Sitkowski added that some large pharmaceutical companies that are exempted from certain tariffs may not see as much impact by the first sale rule change, noting that some drugmakers have struck deals with the White House to invest in the US in exchange for a three-year tariff exemption.
