Washington DC: US President Donald Trump on Thursday (local time) announced tariffs of up to 100 per cent on imports of branded and patented pharmaceutical drugs. These tariffs will come into force from October 1. Trump made the announcement regarding this on his Truth Social account.
“Starting October 1, 2025, we will be imposing a 100 per cent Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America," the US President said.
Notably, there will be no tariffs on Pharma products manufactured in the US. "IS BUILDING will be defined as, "breaking ground" and/or "under construction." There will be no Tariff on these Pharmaceutical Products if construction has started. Thank you for your attention to this matter!" Trump added.
How Will These Tariffs Affect the Indian Pharmaceutical Industry?
Tariffs on the pharmaceutical Industry will significantly impact the earnings of Indian pharma companies. According to a report by SBI Research, nearly 40 per cent of India's total pharma exports are directed to the US market. Notably, the report was released in August this year.
The report had highlighted that if the US imposes 50 per cent tariffs on Indian pharma exports as well, the earnings of pharmaceutical companies may decline by 5 to 10 per cent in FY26.
"A possible tariff of 50 per cent on pharma exports may hit earnings of pharma companies by 5 per cent- 10 per cent in FY26, as many big pharma companies' revenues from the US stood in the range of 40-50 per cent," the report had stated.
In 2024, India's share in the US's total pharma imports stood at six per cent. Generic drugs account for 90 per cent of prescriptions dispensed in the US but represent only 26 per cent of total drug spending as of 2018.
The report also pointed out that health expenditure per person per year in the US is around USD 15,000, and India's 35 per cent share in generic drug supplies. Notably, an increase in tariffs on the pharma industry will also have a significant impact on the health expenditure of US citizens.
