Trump plans heavy tariffs on foreign-made drugs to boost US pharma industry; India to hit hard
PTC Web Desk: US President Donald Trump has announced plans to impose heavy tariffs on foreign-manufactured drugs, aiming to bring pharmaceutical production back to America and strengthen the domestic drug industry.
Speaking at a press conference, Trump criticised other countries for putting pressure on drug companies to lower prices abroad while American consumers continue to pay significantly higher rates. "In London, a drug sells for $88, but in America, the same drug costs $1,300. This is going to stop," he said.
Trump claimed that once tariffs are in place, drug companies will be compelled to return to the US due to the massive market it offers. He warned that those unwilling to relocate would face substantial taxes. However, he did not specify the timeline or rate for the proposed tariffs on pharmaceuticals.
The announcement has triggered concern among market analysts and industry experts. David Ricks, CEO of Eli Lilly, told the BBC that imposing tariffs could negatively impact research and development (R&D), potentially slowing the innovation of new medicines.
According to The New York Times, most generic drugs in the US are imported from India and China. Experts warn that rising drug prices and supply chain disruptions could ultimately hurt American patients the most.
India supplies around 40% of all generic drugs consumed in the US, including antibiotics, antidepressants, and cardiovascular medications. These affordable Indian generics reportedly help the US healthcare system save billions annually. In 2022 alone, the US saved an estimated $219 billion due to drug imports from India.
Currently, the US does not impose tariffs on pharmaceutical imports. While Trump recently introduced a "Liberation Day" tariff of 10% on general imports, and reciprocal tariffs from April 9, the pharmaceutical sector was exempted. Nonetheless, a 26% tariff on other Indian goods has taken effect as of today.
Generic drugs, which are chemical equivalents of branded medications, are significantly cheaper since they don't involve new R&D costs. In the US, the FDA regulates generic drug approval, while India's CDSCO oversees domestic production. Generics now account for 90% of prescriptions in America.
India remains the world's largest producer of generic drugs, and any tariff shift by the US could have far-reaching consequences for both economies and millions of patients worldwide.
- With inputs from agencies
