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The Trump administration has proposed steep tariffs on imported medicines, with officials even suggesting duties of up to 200 per cent on some drugs, according to the Associated Press. If imposed, this would mark a dramatic shift, as most medicines currently enter the US duty-free.
As per the report, the administration has invoked national security provisions under Section 232 of the US Trade Expansion Act of 1962, arguing that America needs to boost domestic drug manufacturing. The COVID-19 pandemic highlighted shortages and heavy reliance on imports, which Washington now sees as a strategic vulnerability.
Possible impact on drug prices
Analysts warn the move could raise prices and disrupt supply chains. ING’s Diederik Stadig noted that even a 25 per cent tariff could increase US drug costs by 10–14 per cent, with low-income households and older patients most affected. Generics, which make up over 90 per cent of US prescriptions, would be hit hardest as these manufacturers work on thin margins.
Why India matters
India is one of the world’s biggest suppliers of affordable generic medicines and active pharmaceutical ingredients (APIs). According to Sudarshan Jain, Secretary General of the Indian Pharmaceutical Alliance, the US has currently “excluded” Indian generics from immediate tariff enforcement because they are “crucial for affordable care” in America.
Sandeep Pandey, co-founder of Basav Capital, told ANI that India accounts for around 6 per cent of US pharmaceutical imports, but its role is critical as many essential drugs depend on Indian inputs. Past disruptions have shown the risks: a temporary pause at an Indian factory once caused chemotherapy shortages in the US.
Why rebuilding US supply chains is tough
Over decades, global pharma production shifted to countries like India, China, Ireland, and Switzerland. Experts say bringing manufacturing back to the US will be expensive and slow. Marta Wosinska of the Brookings Institution explained that while producing all key medicines domestically would be ideal, “it costs a lot of money” and would make drugs more expensive for patients.
Industry and legal pushback
Big pharma companies like Roche and Johnson & Johnson have announced multi-billion-dollar investments in US operations, but experts point out that this will not immediately replace imported active ingredients.
Meanwhile, the proposed tariffs are already facing legal hurdles. A US appeals court recently ruled that such sweeping measures require Congressional approval. The case is likely to reach the Supreme Court, adding to uncertainty for global drugmakers.
What it means going forward
For now, the disruption may be delayed because many companies have stockpiled inventories. But if tariffs of even 25–50 per cent are imposed in the coming years, US drug prices are set to rise. For India, the immediate threat seems limited, but as Jain cautioned, any shift in US policy could have major consequences for India’s $25 billion pharma export industry.
