Trump Administration Drops Plans to Impose Tariffs on Generic Drugs: A Positive Development for Indian Pharmaceutical Industry

President Trump announced last month the implementation of 100 percent tariffs on branded pharmaceutical products.

According to a report by The Washington Post, the Trump administration has decided against imposing tariffs on generic medications imported from foreign countries, following extensive deliberations over whether to tax the majority of prescription drugs used in the United States.

Although this decision is not yet finalized and could potentially change in the upcoming weeks, it represents welcome news for Indian pharmaceutical manufacturers, who constitute the largest provider of generic prescription medications to the American market, as well as for US consumers who rely on these more affordable medicines.

Data from IQVIA, a prominent medical analytics firm, indicates that India supplies approximately 47 percent of all generic prescriptions filled at US pharmacies.

In early September, President Trump announced plans to impose 100 percent tariffs on branded pharmaceuticals beginning October 1, but notably excluded generic drugs from these measures. The tariff increase primarily targeted branded and patented medications exported by multinational pharmaceutical corporations such as Pfizer and Novo Nordisk.

According to The Washington Post, Trump delayed making a decision regarding tariffs on generic medications to allow his administration additional time for negotiations with pharmaceutical companies.

The report indicates that members of President Trump's Domestic Policy Council believe that imposing tariffs on generic medications would likely result in higher prices and potential drug shortages for American consumers.

Council members reportedly also argued that tariffs might prove ineffective for generic drugs, as these medications are produced so inexpensively in countries like India that even substantial tariffs would likely not make US production economically viable.

This development represents positive news for the Indian pharmaceutical sector. The American market accounts for slightly over one-third of India's pharmaceutical exports, which predominantly consist of less expensive generic versions of popular medications. Indian companies reportedly ship approximately $20 billion worth of generic medications to the United States annually.

Generic medications from India sold in the US market help maintain affordable medication costs for American consumers by providing less expensive alternatives to branded medications for treating a wide range of conditions from diabetes to cancer.