Trump's 200% tariff threat on generics impacts Indian pharma

US President Trump announced tariffs of 100% from Aug 2028 and 200% from Aug 2029 on imported generic medicines unless manufacturing is relocated to the US.

India supplies nearly 47% of generic prescriptions dispensed in the US and accounts for 38% of India's pharma exports ($10 billion) to the US.

Generic medicines remain exempt from tariffs for two years (until Aug 2028), providing a window for negotiation and supply chain recalibration.

Industry experts warn that 100-200% duties could make certain generic exports commercially unviable and squeeze margins, while also raising prices for US consumers.

Key starting materials and active pharmaceutical ingredients (APIs) are manufactured mainly in China and India, making it difficult for the US to replicate the ecosystem locally.

Companies like Sun Pharma, Dr Reddy's, Cipla, Lupin, Aurobindo Pharma, and Zydus Lifesciences generate 35-50% of revenue from the US and could be hit harder.

Some Indian companies already have manufacturing facilities in the US, which could partially mitigate the impact.

Companies are likely to shift from low-margin commodity generics to complex generics, biosimilars, oncology, and higher-value therapies.

Generic manufacturing cannot be shifted quickly due to technology transfer, regulatory approvals, and supply ecosystem requirements.

Dr Reddy's Labs co-chairman GV Prasad stated they have no plans yet for US manufacturing due to long regulatory processes.