US President Donald Trump’s recent announcement of 25 percent tariffs on imports from India and US administration letters to drug companies to slash drug prices will have no impact going forward on the Indian pharma industry, according to the Indian Drug Manufacturers’ Association (IDMA) national spokesperson Dr Viranchi Shah.
“As of now US tariffs are not applicable on pharmaceuticals, therefore, there seems to be likely no impact going forward on the Indian pharma industry. However, IDMA would continue to monitor and examine the situation,” Dr Shah added.
US President yesterday sent letters to the leaders of 17 major pharmaceutical companies outlining how they should slash US prescription drug prices to match those paid overseas.
Industry experts have also raised concern that any future inclusion of pharma in US tariff policy could lead to US generic price spikes by 10-25% by 2026. This is also factoring in thin margins of 5 to 15% and the 3-5 years needed to relocate production domestically or diversify supply chains.
Relocation challenges stem from higher US production costs (3-4x those in India) and regulatory hurdles for new facilities, which could exacerbate shortages in the US market where generics already account for 90% of prescriptions.
Pharma Industry expert Vikas Nim said that the order could weaken US bargaining in trade talks, with countries like India threatening countermeasures that jeopardize exports. It may encourage fairer practices long-term but risks short-term chaos, including higher bills and fewer innovations. Upcoming pharma policy announcements in the US expected in two weeks may clarify enforcement. Overall, while aiming to rebalance trade, the tariffs may inadvertently heighten the very drug pricing issues the US administration seeks to address.
Trump signed a sweeping executive order in May demanding drug makers cut US medicine prices to match those abroad, saying that if companies did not comply, the government could use rulemaking to bring prices down or pursue other measures, such as importing cheaper medicines from overseas.
Source : Pharmabiz
