US to Impose 100% Tariff on Imported Branded Pharmaceuticals
US President Donald Trump announced a 100% tariff on all imported branded or patented pharmaceutical products, effective October 1, 2025. The measure is intended to boost domestic manufacturing. Companies will be exempt if they are actively building production facilities in the United States, defined as having broken ground. The move is expected to significantly impact global pharmaceutical companies, including many in India which is a major drug exporter to the US, leading to a drop in Indian pharma stocks.
Unpacked:
Major exporters like Sun Pharmaceutical Industries, Cipla, Dr. Reddy’s Laboratories, Divi’s Laboratories, and Torrent Pharmaceuticals are most affected, as they are leading suppliers of branded and patented drugs to the US market and have significant exposure to US exports.
India is the world’s third-largest producer of drugs by volume and supplies about 20% of global generic drugs, with a substantial share of exports going to the US, especially in generics and specialty medicines.
The tariff is designed to incentivize pharmaceutical companies to build manufacturing capacity in the US, boost domestic production, and reduce reliance on imports, thereby supporting American jobs and potentially lowering supply chain risks.
The tariff may disrupt global supply chains and lead to higher drug prices in the US. It could force foreign companies to invest in US facilities or lose market access, and may reduce India’s export revenue, impacting its rapidly growing pharmaceutical sector.