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Published: March 30, 2025 11:39 AM IST
By Joy Pillai | Edited by Joy Pillai
Seems like United States President Donald Trump is in the mood to impose taxes on everything coming to America from other countries. After imposing a 25 percent tariff on autos, he is expected to announce fresh tariffs on pharmaceutical companies. Reports suggest that the Trump administration is planning to impose new taxes on goods from pharmaceutical companies.
However, it is not clear when these tariffs will be implemented and on which medicines. It is believed that the US President is imposing tariffs to encourage pharmaceutical companies to manufacture medicines in America itself. Notably, this move may increase medicine prices in America. However, a section of people believes that this decision will benefit companies manufacturing medicines in the US. On the contrary, imposing high tariffs on Indian pharmaceutical companies could cause huge losses to India.
While addressing media on Air Force One, the US President stated that he is ready to make deals with countries that are willing to bypass these taxes. However, these deals will be made after his administration announce the tax next month.
Trump indicated that several countries, including the UK, have initiated discussions with the United States regarding potential agreements. While he expressed optimism about the possibility of reaching such agreements, he declined to confirm whether any would be finalized before April 2nd, citing the ongoing nature of the negotiations.
India is a major supplier of pharmaceuticals to the United States, exporting over USD8 billion worth of medications annually. These exports primarily consist of generic drugs, which are comparable to brand-name medications but are more affordable. In 2022, Indian-manufactured drugs accounted for 40% of all US prescriptions filled.
As per several media reports, the US healthcare system saved USD219 billion in 2022 from medicines manufactured by Indian companies. A total of USD1.3 trillion was saved between 2013 and 2022. Another USD1.3 trillion is expected to be saved from generic medicines in the next five years.
American tariffs on pharmaceutical companies could significantly affect Indian pharmaceutical firms. Increased costs due to these tariffs may reduce sales in the US market and potentially lead to a decline in the value of Indian pharmaceutical company stocks, despite the sector’s current market strength.
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