US President Donald Trump has announced a new tariff plan on imported generic medicines. Under this scheme, heavy import duty (tariff) will be imposed on these medicines from 2028. Trump says that the purpose of this step is to bring drug manufacturing back to America and to encourage pharmaceutical companies to set up factories in America.
Donald Trump told on his social media platform Truth Social that from August 1, 2026, only 0 percent tariff will be applicable on generic medicines imported into America for the next two years. However, after this, tariff up to 200 percent will be imposed.
What did Donald Trump say?
He wrote, “From August 1, 2026, zero percent tariff will continue for two years on all generic drugs coming into the US. After this, the tariff will be increased to 100 percent for one year and after that it will be increased to 200 percent.”
What is the purpose of this decision?
Trump said that the purpose of this policy is to restart the production of generic medicines in America (Reshore). He says that companies who do not set up plants and production units in America within the stipulated time will have to face heavy tariffs.
He said in his post, “This decision has been taken to bring the production of generic drugs back to America. Companies that do not set up plants and equipment in America within the stipulated time will be punished through this tariff. The purpose of this policy is to protect the people of America.” Trump claimed that due to his government’s policies, drug manufacturing units are being built across America on a scale never seen before.
He said, “The current policy to patented, branded and innovative drugs will continue as before. Pharmaceutical factories are being built across America on a scale never seen before.”
What are generic medicines?
Generic medicine is an FDA approved copy of a branded medicine. These medicines contain the same active pharmaceutical ingredient (API) which is present in the original branded medicine. Because of this, both medicines work in the same way, provide similar therapeutic benefits and are given in the same way, such as tablets, syrups or other forms.
Generic drugs are usually much cheaper than branded drugs because the companies making them do not have to repeat expensive clinical trials like the original drug. However, these medicines also have to meet the same standards of safety and quality. The inactive ingredients present in them like binder, color or flavor may be different. For this reason, the colour, shape, taste or appearance of generic medicines may be different from the branded medicine.
How many medicines are sent to America from India?
India is one of the largest suppliers of generic drugs to America. Every year, India exports medicines worth about $9.7 billion (about Rs 81,000 crore) to the US, which accounts for about 36% to 38% of the country’s total pharmaceutical exports. About 4 to 5 out of every 10 generic medicines used in America are made in India. These medicines are mainly used in the treatment of diabetes, high blood pressure, cancer and mental health diseases.
Will it affect India?
If 100% and then 200% tariffs are imposed on generic drugs made in India after 2028, then:
- Indian medicines will become very expensive in the American market.
- The costs of American importers will increase.
- Many companies can reduce imports from India.
- There may be pressure on exports and profits of Indian pharmaceutical companies.
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