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On Friday, Trump announced that starting October 1, all branded and patented drug imports will face a 100% tariff unless companies are building factories in the US
US President Donald Trump (Image: Andrew Harnik/Getty Images/AFP)
Starting October 1, 2025, all branded and patented medicines entering the United States will face a 100 per cent tariff unless their makers are building factories in America. The move, announced by President Donald Trump on his social media platform Truth Social, is part of a broader protectionist drive.
We take a look at what lies behind the decision, how it could affect American consumers, and whether India’s pharma sector is at risk.
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What Did Trump Announce?
On Friday, Trump declared that branded and patented pharmaceutical imports into the US would attract a 100 per cent tariff from October 1, 2025. The only exemption will be for companies that are already building manufacturing plants in America.
“Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America,” he posted on Truth Social.
He went on to clarify that the phrase “IS BUILDING” would be defined as “breaking ground” or being “under construction.” That means companies cannot simply make a promise; they must have physical construction underway to avoid the tariff.
The announcement follows months of tariff actions across industries. Just a day earlier, Trump had announced 50 per cent duty on imported kitchen cabinets and bathroom vanities, 30 per cent on upholstered furniture, and 25 per cent on heavy trucks, all effective from October 1.
Why Did Trump Take This Step?
Donald Trump has long argued that tariffs are the best way to revive American industry and reduce reliance on foreign supply chains. His latest move is framed as a push to bring back drug manufacturing to US soil, forcing multinational companies to prove they are building factories in the US if they want to avoid penalties.
The decision also follows a Trump administration investigation into the pharmaceutical sector launched in April 2025, which, according to Times Now, gave the White House scope to adjust imports on national security grounds. Trump himself linked the tariff to “National Security and other reasons” in his Truth Social post. He has also claimed that tariffs will help reduce the US budget deficit and generate domestic manufacturing jobs.
But industry watchers point to risks for the American healthcare system. American consumers depend heavily on low-cost generics manufactured in India, and that higher tariffs could fuel price hikes, shortages, and inflation.
In 2024, America imported nearly $233 billion in pharmaceutical and medicinal products, according to Census Bureau figures cited by the Associated Press. Inflation is also edging higher: the consumer price index rose 2.9 per cent over the past 12 months, up from an annual pace of 2.3 per cent in April, when Trump first launched a sweeping set of import taxes.
What Does It Mean For US Pharma And Consumers?
The US is one of the world’s biggest importers of medicines. Much of its healthcare system depends on cheaper imports, especially generic medicines produced abroad.
According to NDTV, India supplies over 45 per cent of generic drugs and 15 per cent of biosimilars used in the US. Analytics firm IQVIA estimated that Indian generics saved the US healthcare system $219 billion in 2022 and $1.3 trillion between 2013 and 2022. Indian manufacturers also provide nearly half of the generic medicines covered under Medicare and commercial insurance plans.
If tariffs are applied strictly to branded and patented drugs, the immediate impact may fall more heavily on multinational giants rather than low-cost generic makers. However, there is growing uncertainty over whether complex generics and specialty drugs, areas where Indian firms are expanding, could also be affected.
For US consumers, any widening of the tariff net would likely mean price hikes, drug shortages, and further inflationary pressure in a system already struggling with high medical costs.
Will India Be Hit?
As per Times Now, India is the largest exporter of generic medicines to the US, making the American market its single biggest source of revenue.
According to the Pharmaceuticals Export Promotion Council of India, India exported $27.9 billion worth of pharma products in FY24, of which the US accounted for 31 per cent ($8.7 billion). By the first half of 2025 alone, another $3.7 billion had been shipped.
Exports to the US rose nearly 20 per cent in FY25, reaching around $10.5 billion.
This dependence runs through some of India’s biggest drugmakers. Companies such as Dr Reddy’s, Sun Pharma, Lupin, Aurobindo, Zydus Lifesciences, and Gland Pharma earn 30–50 per cent of their revenues from the American market.
An SBI Research report warned in August that if tariffs were imposed on Indian pharma exports, earnings could decline 5–10 per cent in FY26, given the high exposure to the US market.
India is also crucial to the functioning of the US healthcare system. It accounts for around 6 per cent of US pharmaceutical imports and supplies nearly four out of every ten prescriptions filled in the US.
The worry for Indian firms is twofold:
- Their already thin margins in the US generics space would come under further strain.
- Passing on higher costs to American consumers may not be viable, potentially eroding their competitiveness in the world’s largest pharmaceutical market.
The Bigger Tariff Picture
The pharmaceutical announcement does not stand in isolation. It is part of a sweeping tariff agenda that Trump has rolled out since returning to office.
Alongside drugs, he has levied 50 per cent on kitchen cabinets, 30 per cent on upholstered furniture, and 25 per cent on heavy trucks, all beginning October 1.
For India, the tariff threat comes on top of existing measures. Washington has already imposed 50 per cent tariffs on Indian imports, including a 25 per cent penalty linked to India’s continued purchase of Russian oil. The timing also intersects with ongoing US–India trade negotiations.
Conclusion
Donald Trump’s 100 per cent tariff threat on branded and patented drugs is designed to strong-arm pharmaceutical companies into manufacturing inside America. While pitched as a way to cut deficits and secure supply chains, the move risks fuelling higher drug prices and shortages in the US itself.
About the Author
Karishma Jain, Chief Sub Editor at News18.com, writes and edits opinion pieces on a variety of subjects, including Indian politics and policy, culture and the arts, technology and social change. Follow her @kar…Read More
Karishma Jain, Chief Sub Editor at News18.com, writes and edits opinion pieces on a variety of subjects, including Indian politics and policy, culture and the arts, technology and social change. Follow her @kar… Read More
September 26, 2025, 09:14 IST
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