Tumps's Tarrifs on Branded Pharma expose US manufacturing dependance on India

Tumps's Tarrifs on Branded Pharma expose US manufacturing dependance on India.

US President Donald Trump's announcement of a 100% tariff on imported branded or patented pharmaceutical products, effective October 1, 2025, unless companies establish manufacturing in the US, highlights the country's reliance on foreign production, including from India, for active pharmaceutical ingredients (APIs) and finished drugs.

1. Context of the Tariff Announcement: On September 25, 2025, Trump declared the imposition of a 100% tariff on branded and patented pharmaceuticals imported into the US, aiming to incentivize domestic manufacturing. This measure exempts companies that commit to building production facilities within the US, reflecting an effort to reduce import dependency. The tariff doubles the cost for importers, potentially affecting supply chains and prices, and applies alongside other duties like 50% on cabinets, 30% on furniture, and 25% on trucks. This policy revives themes from Trump's previous term, where trade measures targeted global dependencies.
2. US Pharmaceutical Import Structure: The US imports a significant portion of its pharmaceuticals, with over half of APIs for prescription medicines sourced from India and the European Union. India plays a central role, producing around 60% of solid oral dosage forms for the US market, while the US itself handles 45% of injectables. For generic drugs, which constitute the majority of prescriptions, India supplies over 40% of the US market. This reliance stems from cost-effective production in India, supported by more than 10,000 manufacturing facilities and over 650 US FDA-compliant plants. India ranks as the third-largest producer of medicines by volume globally, making it a key partner in the US supply chain.
3. Exposure of Dependence on India: The tariff underscores vulnerabilities in US pharma supply, particularly from India, which accounts for 31.35% of India's pharmaceutical exports—the largest share to any single market. During the COVID-19 pandemic, Trump personally requested hydroxychloroquine from India, illustrating acute reliance when domestic stocks were insufficient. India's generics have a 54% higher market penetration in the US compared to other sources, but this chain is interlinked with China, which supplies up to 80% of India's APIs. The policy could disrupt Indian exporters, as Trump has already imposed 50% tariffs on certain Indian goods, including a 25% penalty for oil purchases from Russia. This exposes how US healthcare depends on Indian manufacturing for affordability and volume.