Trump administration plans tariffs on generic drugs starting April

American pharmaceutical and healthcare groups are asking President Donald Trump to exempt generic drugs from upcoming tariffs. These groups warn that higher tariffs could increase prices and disrupt the supply chain for medicines. The tariffs are set to begin on April 2, and they are a response to similar tariffs imposed by other countries. India’s pharmaceutical industry is also concerned. The US is the largest market for Indian generic drugs. Indian manufacturers provide extremely low-cost medicines, and many US prescriptions are for these generic drugs. American trade groups argue that tariffs may push local pharmaceutical companies to move manufacturing back to the US, but they fear this will lead to higher prices for consumers. The Healthcare Distribution Alliance (HDA) has stated that distributors already work on very low profit margins. They worry that any increase in costs due to tariffs will create medication shortages and higher costs for patients, particularly those enrolled in Medicare and Medicaid. The Association for Accessible Medicines (AAM) echoed these concerns, explaining that many generic manufacturers cannot absorb the new costs. The report by PwC estimated that a 28% tariff could lead to an increase of $3.4 billion in pharmaceutical costs. India exports a significant amount of generic drugs to the US. In 2024, these exports were valued at around $8.73 billion, making up about 31% of India’s total pharmaceutical exports. By contrast, US pharmaceutical exports to India were much smaller, at $635 million. Indian generics save the US healthcare system significant amounts of money. For example, in 2022 alone, they saved the system $219 billion. Indian companies are now considering changes to their business strategies in response to the potential tariffs. Some experts in India argue that the country should negotiate with the US from a position of strength, given its strong manufacturing capabilities. They believe that India should emphasize the quality and affordability of its medicines instead of yielding to US pressure.