Indian pharma seeks engagement with the US administration after Trump’s generic drug tariff plan

India’s pharmaceutical industry on Wednesday sought engagement with the US administration after President Donald Trump announced a phased tariff regime for imported generic medicines, saying Indian drugmakers remain trusted partners in ensuring affordable medicine supplies for American patients.

The industry’s response came after Trump announced on Truth Social that imported generic medicines would continue to attract zero tariffs until August 1, 2028, after which they would face a 100% tariff for one year and 200% thereafter. The move, he said, is intended to “RESHORE Generic Pharmaceutical Production into America” and penalise companies that fail to establish manufacturing facilities in the US during the transition period. Trump added that the existing policy for patented, branded and innovative medicines would remain unchanged.

The announcement is significant for India, as the US is the country’s largest pharmaceutical export market, accounting for nearly a third of India’s drug exports by value. India is also estimated to supply 40-45% of all generic medicines dispensed in the US, making it a critical partner in the American healthcare system. The proposed tariff roadmap could therefore influence future investment decisions by Indian drugmakers, many of which already have manufacturing operations in the US.

Responding to the announcement, the Indian Pharmaceutical Alliance (IPA), which represents the country's leading pharmaceutical companies, said India has long been a reliable supplier of affordable medicines to the US while also investing in manufacturing and research within the country.

“India has been a trusted partner in ensuring the supply of affordable and quality-assured medicines for American patients. Leading Indian pharmaceutical companies have a US presence, with over 40 facilities, supporting American jobs and investing in manufacturing, research and resilient supply chains,” said Sudarshan Jain, Secretary General, IPA.

He added that the industry would continue to engage with the US administration “to build a stronger partnership and further strengthen health and medicine security for both countries”.

Companies such as Sun Pharma, Dr Reddy’s Laboratories, Aurobindo Pharma, Lupin, Zydus Lifesciences, Cipla and Granules India derive a significant share of their revenue from the US market. Most of these companies have, over the years, established manufacturing plants, research centres and packaging facilities in the US, positioning them to expand local production if required under the proposed policy.

Granules India, which operates three facilities in the US, said its existing investments position it well to support the Trump administration's push for greater domestic manufacturing.

“Granules supports the goal of building a more resilient pharmaceutical supply chain. Through our three US facilities, including one manufacturing facility with the ability to expand capacity, we have invested in strengthening our US footprint and are well positioned to support increased onshoring,” said Priyanka Chigurupati, Executive Director, Granules India.

She added that the company’s manufacturing network is capable of handling technology transfers for key products, several of which have already been successfully implemented as part of its business continuity strategy.

At the same time, the company cautioned that any sharp increase in the cost of imported generic medicines could have unintended consequences for the US healthcare system.

“Generic medicines account for nearly 90% of prescriptions dispensed in the US while representing only about 13% of prescription drug spending. Around 40-45% of these medicines come from India. Any significant increase in the cost of generic medicines has the potential to increase costs across the healthcare system and ultimately affect patient affordability,” Chigurupati said.

While the proposed tariffs are not due to take effect immediately, the industry is expected to seek greater clarity from the US administration on how they will be implemented, including whether they will apply uniformly across all generic medicines and whether companies with an established manufacturing presence in the US will receive any policy flexibility.