NewKerala.com

Key Points

The United States is set to impose 100% tariffs on branded pharmaceutical products starting October 1st. This move could significantly impact the global pharmaceutical landscape, potentially benefiting Indian generic drug manufacturers. Indian pharma companies currently supply a substantial portion of generic drugs to the US market, offering critical cost savings. The tariff policy might drive increased demand for more affordable generic alternatives.

Key Points: US Tariffs Boost Indian Generic Pharma Market Outlook

  • India supplies 40% of US generic drug consumption
  • Pharmaceutical tariffs could reshape global drug market
  • Generic drugs remain exempt from new trade restrictions
  • Indian pharma saves US healthcare $219 billion annually
2 min read

Domestic generic producers may see near-term gains as US imposes tariffs on pharma

US 100% tariffs on branded drugs may drive demand for cost-effective Indian generic pharmaceuticals, potentially benefiting domestic producers.

"Companies manufacturing branded products abroad for the US may face headwinds - Manoj Mishra, Grant Thornton Bharat"

New Delhi, Sep 26

Domestic generic producers are likely to see near-term gains as higher prices for branded drugs can push demand towards cost-effective alternatives after the US announced its decision to impose 100 per cent tariffs on the pharmaceuticals industry from October 1, analysts said on Friday.

Generic drugs are currently exempted from US tariffs and according to Sudarshan Jain, Secretary General, Indian Pharmaceutical Alliance (IPA), the latest tariff announcement is for "branded or patented drugs, and not applicable to generics".

Domestic pharmaceutical firms supply a substantial proportion of drugs to US residents.

As per industry sources, overall, medicines from Indian companies provided $219 billion in savings to the US healthcare system in 2022 and a total of $1.3 trillion between 2013 and 2022.

According to Manoj Mishra, Partner and Tax Controversy Management Leader, Grant Thornton Bharat, the US decision to impose 100 per cent tariffs on branded and patent-protected medicines is a significant shift in trade policy, given that pharmaceuticals were earlier exempt from reciprocal tariffs and Section 232 duties.

"For Indian pharma, which supplies nearly $20 billion worth of generics to the US, that is about 40 per cent of its consumption, the impact is two-fold. Companies manufacturing branded products abroad for the US may face headwinds, while domestic generic producers could see near-term gains as higher prices for branded drugs push demand toward cost-effective alternatives," he mentioned.

From life-saving oncology drugs and antibiotics to chronic disease treatments, India is helping stabilise global healthcare systems.

Currently, India supplies over 45 per cent of generic and 15 per cent of biosimilar drugs used in the US.

President Trump has announced that tariffs will not apply to pharmaceutical products if a company is building a manufacturing plant in the US.

"Starting October 1st, 2025, we will be imposing a 100 per cent tariff on branded and patented Pharmaceutical Product, unless a company IS BUILDING their Pharmaceutical Manufacturing Plant in America," Trump posted on Truth Social.

- IANS

Share this article:

Reader Comments

R
Rohit P
Finally some recognition for our pharmaceutical sector. We've been the pharmacy of the world for decades. Hope this leads to more investment in R&D and manufacturing infrastructure here.
M
Michael C
While this benefits Indian companies, I'm concerned about American patients who rely on these medicines. Tariffs always end up hurting consumers in the long run.
A
Ananya R
$219 billion savings in just 2022? That's massive! Our generic industry truly makes healthcare affordable globally. This could be the push needed for more Indian companies to expand their US market share.
S
Sarah B
The exemption for companies building plants in America seems like protectionism. Hope our government negotiates well to protect Indian interests while maintaining global partnerships.
K
Karthik V
Quality control remains crucial. We must ensure that while expanding, our companies maintain the highest standards. This opportunity comes with great responsibility. 🙏

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50