The White House has shelved plans to impose tariffs on generic drug imports, a move that comes as a relief to Indian pharmaceutical companies, which supply nearly half of all generic prescriptions in the United States, The Times of India (TOI) has reported.
The decision also reassures millions of Americans who rely on imported generics to manage conditions ranging from hypertension and depression to ulcers and high cholesterol.
India is the largest single source of generic prescription drugs for the US market, far surpassing domestic producers, which hold a 30% share. According to IQVIA, a global medical data analytics company, India supplies 47% of all generic prescriptions filled in US pharmacies.
The White House decision represents a major scaling-back of the Commerce Department’s tariff investigation into pharmaceuticals, according to the Wall Street Journal. When the probe was announced in April, the Federal Register notice stated it would target “both finished generic and non-generic drug products, as well as drug ingredients.”
According to the report by TOI's Chidanand Rajghatta, the move follows internal debate within the MAGA faction. Hardliners pushed for tariffs to bring pharmaceutical manufacturing back to the US, citing national security concerns.
Also Read: Trump delivers another bitter tariff pill. Who’s set to bite the dust?
However, members of President Trump’s Domestic Policy Council argued that “applying tariffs to generic medications would result in price increases and even drug shortages for consumers.” They added that tariffs wouldn’t work for generics because production costs in countries like India are so low that even very high tariffs might not make US manufacturing profitable.
Shares of Indian pharma companies were trading in the green with Cipla at Rs 1504.30, up 0.64%; Sun Pharma at Rs 1633.00, up 0.08%; Dr Reddy's at Rs 1256.35, up 1.78%; and Aurobindo Pharma at Rs 1106.00, up 3.38% as of Thursday on 11 AM.
Trump’s 100% tariff announcement
From October 1, 2025, Trump announced via Truth Social that the White House would impose 100% tariffs on patented drugs, except for companies building pharmaceutical plants in the US. He stated, “Starting October 1st, 2025, we will be imposing a 100 per cent Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America. 'IS BUILDING' will be defined as 'breaking ground' and/or 'under construction.’”
Despite the announcement, many questions remain: which drugs are covered, how “branded” or “patented” will be defined, and whether Indian generics or Active Pharmaceutical Ingredients (APIs) could be affected. Branded generics and APIs used in larger products could face duties, leaving Indian drugmakers in a high-stakes position.
India’s dominance in the US pharma market
India’s pharma exports have been on a strong growth trajectory. In FY25, annual exports touched a record $30 billion, driven by a 31% surge in March year-on-year. August 2025 alone rose from $2.35 billion in August 2024 to $2.51 billion. According to Pharmexcil, about $8.7 billion (31%) of FY24 exports went to the US, with $3.7 billion shipped overseas in the first half of 2025.
Indian firms dominate key therapeutic areas such as hypertension, mental health, lipid regulators, nervous system disorders, and anti-ulcerants, supplying more than half the prescriptions in these categories.
By some estimates, Indian generics saved the US healthcare system $219 billion in 2022 alone and $1.3 trillion between 2013 and 2022.
(With inputs from Times of India)
The decision also reassures millions of Americans who rely on imported generics to manage conditions ranging from hypertension and depression to ulcers and high cholesterol.
India is the largest single source of generic prescription drugs for the US market, far surpassing domestic producers, which hold a 30% share. According to IQVIA, a global medical data analytics company, India supplies 47% of all generic prescriptions filled in US pharmacies.
The White House decision represents a major scaling-back of the Commerce Department’s tariff investigation into pharmaceuticals, according to the Wall Street Journal. When the probe was announced in April, the Federal Register notice stated it would target “both finished generic and non-generic drug products, as well as drug ingredients.”
According to the report by TOI's Chidanand Rajghatta, the move follows internal debate within the MAGA faction. Hardliners pushed for tariffs to bring pharmaceutical manufacturing back to the US, citing national security concerns.
Also Read: Trump delivers another bitter tariff pill. Who’s set to bite the dust?
However, members of President Trump’s Domestic Policy Council argued that “applying tariffs to generic medications would result in price increases and even drug shortages for consumers.” They added that tariffs wouldn’t work for generics because production costs in countries like India are so low that even very high tariffs might not make US manufacturing profitable.
Shares of Indian pharma companies were trading in the green with Cipla at Rs 1504.30, up 0.64%; Sun Pharma at Rs 1633.00, up 0.08%; Dr Reddy's at Rs 1256.35, up 1.78%; and Aurobindo Pharma at Rs 1106.00, up 3.38% as of Thursday on 11 AM.
Trump’s 100% tariff announcement
From October 1, 2025, Trump announced via Truth Social that the White House would impose 100% tariffs on patented drugs, except for companies building pharmaceutical plants in the US. He stated, “Starting October 1st, 2025, we will be imposing a 100 per cent Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America. 'IS BUILDING' will be defined as 'breaking ground' and/or 'under construction.’”
Despite the announcement, many questions remain: which drugs are covered, how “branded” or “patented” will be defined, and whether Indian generics or Active Pharmaceutical Ingredients (APIs) could be affected. Branded generics and APIs used in larger products could face duties, leaving Indian drugmakers in a high-stakes position.
India’s dominance in the US pharma market
India’s pharma exports have been on a strong growth trajectory. In FY25, annual exports touched a record $30 billion, driven by a 31% surge in March year-on-year. August 2025 alone rose from $2.35 billion in August 2024 to $2.51 billion. According to Pharmexcil, about $8.7 billion (31%) of FY24 exports went to the US, with $3.7 billion shipped overseas in the first half of 2025.
Indian firms dominate key therapeutic areas such as hypertension, mental health, lipid regulators, nervous system disorders, and anti-ulcerants, supplying more than half the prescriptions in these categories.
By some estimates, Indian generics saved the US healthcare system $219 billion in 2022 alone and $1.3 trillion between 2013 and 2022.
(With inputs from Times of India)
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