Trump's 100% Pharma Tariff Shakes Market, But Indian Generics May Be Safe

In its April 2 report, Jefferies had noted that "the Trump administration is preparing to impose tariffs of 100 per cent on certain medicines," adding that the levies could be applied to companies that have not struck trade agreements with the White House.

Trump has now moved ahead with the announcement, escalating trade tensions in the global pharmaceutical supply chain.

However, the brokerage had underlined that the policy impact on India could be limited, particularly for generic drug exporters. "Our base case remains that generics would remain exempted from any tariffs in the US," Jefferies said, citing concerns over drug shortages and pricing pressures if low-cost generics are targeted.

The report emphasised that imposing tariffs on generics, which operate on thin margins, could "risk higher prices from potential drug shortages caused by supply-chain disruptions."

Jefferies also highlighted that any tariff framework is likely to remain nuanced, with differential treatment based on trade agreements. It noted that "tariffs on imports from countries that have struck trade deals... would also be capped according to the terms of the deal."

Among Indian companies, Sun Pharma was identified as relatively more exposed due to its speciality portfolio. Still, even here, the impact may be capped. "We therefore believe the max tariffs on Sun Pharma's innovative products would be capped at 15 per cent," the report said, given manufacturing linkages with regions like the EU and South Korea that already have negotiated tariff arrangements with the US.

Overall, while Trump's announcement marks a significant escalation, Jefferies' analysis suggests that India's large generic drug exports -- a critical component of US healthcare affordability -- may remain largely insulated, at least in the base-case scenario.

- ANI