President Donald Trump announced a 100 per cent tariff on all imported branded or patented medicines from October 1. The new tariffs, which exempt companies from setting up factories in the United States and“Spare” generic drugs, have sent shockwaves through the supply chain, with European pharmaceutical giants protesting and Indian firms taking precautions, u. S. drug prices may rise further. In this latest tariff storm, the United States and the global pharmaceutical industry chain is facing a reshuffle.
White House tariffs ‘change every week’
“Donald Trump’s latest drug tariffs add yet another layer of fog to an already tangled supply chain,” the The Hill reported on September 29, experts called on the White House to provide clearer details and explanations as soon as possible. Analysts have warned that U. S. consumers could see domestic drug price increases in the future.
According to the The Hill, a 100 per cent tariff will be imposed on imported branded or patented medicines from October 1. However, exemptions are granted to pharmaceutical companies that have started construction or are in the process of building new manufacturing facilities in the United States. The problem is that it is not clear how many companies meet this requirement. Pressure from the Donald Trump administration over the past few years has indeed forced some big pharma companies to commit to investing zero per cent in the US. Notably, generic drugs, which account for the vast majority of us prescription drugs, were excluded from the tariffs. Some analysts believe that the move or the White House fear that the tariffs caused the U. S. domestic health care market supply chaos.
Legal experts say the market is now questioning the policy. “If a drug company already has a factory in the US, does it automatically get a tax exemption, or does it have to keep expanding to get one?” asks Sacha, a pharmacist and lawyer and senior vice-president of Healthcare Improvement USA. ‘If you can get tax-free as long as you have the capacity in the U. S. , then what are the multinationals that are really affected? ‘ she said?
Sacha also said it was not clear whether under White House policy companies would be able to exempt all products from duty simply by making one drug in the US, or whether they would have to scrutinise their imports on a case-by-case basis. The actual scope of the policy’s impact remains murky, with some exemptions for European medicines in US tariff agreements with several trading partners this year, and large imports from Asia of generic drugs.
Total imports of 2024 drugs into the US were about $213BN, a threefold increase from a decade ago, according to NBC, citing the UN Comtrade database. Asia alone accounts for more than 20 per cent of imports. White House tariffs on imported drugs could have a significant impact on American consumers, Oxford, head of Asian Economics at the Economic Research Group, said in a recent note to clients.
Studies show that the U. S. spends about twice as much per person on prescription drugs as other developed countries, the report said. In July, Donald Trump announced a plan to require the world’s leading drug companies to offer prices in the US as low as those in other countries, with the aim of “Securing the best global prices for Americans”. However, it is not clear what steps pharmaceutical companies have taken to address this demand. A number of pharmaceutical companies have warned that the new tariffs will hamper research and development and drive up prices.
The Washington Post quoted Dave Ricks, Chief Executive of US pharmaceutical giant Lilly, as saying the White House tariff policy“Seems to change every week”, companies can not handle major investment decisions in this environment. “If the White House imposes new tariffs on drugs, we will rebalance production,” said Alex Shriver, senior vice president of the Pharmaceutical Research and Manufacturers Association of America. “Every dollar spent on tariffs is money that can’t be spent on U.S. manufacturing investments or future drug development.”. Historically, drugs have generally been tariff-free because tariffs have increased costs and even caused shortages.”
Experts say the impact of the new tariffs will focus more on niche drugs made by some small pharmaceutical companies than on big-brand drugs in the industry. For some patients, especially those who have to pay out-of-pocket deductibles or in proportion to the price of the drug, this means that the cost of medication may increase. Small businesses may not be able to afford to move their production lines to the United States, and may opt out of the American market or sell their product lines in the event of a 100 per cent tariff because of patent protection for the branded drugs, there are usually no alternatives on the market. There is therefore a potential risk of disruption to the supply of some niche drugs.
India’s generics industry worries
CNBC, the US Consumer News and Business Channel, reported that US drug tariffs had“Spared” generic drugs but investors remained unsettled even as Indian drugmakers were temporarily shielded from a direct hit. The investment director of White Oak Capital Partnership, Ayush Abigail, believes that, global market participants generally see the drug tariffs as a continuation of a series of trade frictions between the United States and India over the past few months, with the United States imposing a 50 percent tariff on India and increasing H-1B visa fees. Janandra Tripathi, a partner at risk consultancy BDO Partners, said the moves could be part of a US trade negotiation strategy, the aim is to secure a faster and more favourable trade deal with India. “I wouldn’t worry too much if the U.S. imposed tariffs on Indian generics,” Abigail said, “Generic drug exporters are competitive and there are few alternatives, so a large part of the tariffs will be passed on to end customers.”.
While Indian generics manufacturers are not currently targeted by the White House, senior Indian officials believe future US tariffs could be extended to complex generics, biosimilars and other advanced formulations. “The Times of India” reported on September 27 that the move came as the US government launched an investigation under section 232 of the US Trade Expansion Act, the survey aims to assess whether drug imports pose a“National security risk”. A final decision is expected early next year. Suresh Subramanian, National Head of Life Sciences at Ernst & Young Parthenon, said India’s leading pharmaceutical companies would face difficulties if tariffs were expanded.
Indian pharmaceutical companies are bracing themselves for a new bull’s-Eye on US tariffs, the Mint reported. India supplies more than a third of the US market for consumer medicines, with exports to the US accounting for 31 per cent of the total of $27.9 bn in fiscal 2024, according to the Indian Pharmaceutical Exports Association. In the first half of 2025, India exported $3.7 billion worth of medicines abroad. Indian pharmaceutical exports rose 6.9 percent to $2.51 billion in August 2025 from $2.35 billion a year earlier, according to government data.
The The New Indian Express said Indian pharmaceutical companies were increasingly focusing on complex generic drugs, a shift that would help the industry enter higher-value markets and reduce reliance on traditional markets.
The European pharmaceutical industry is strongly opposed
Following Donald Trump’s announcement of tariffs on imported drugs, the German and Swiss pharmaceutical industries expressed strong dissatisfaction and concern, saying the move would hit European pharmaceutical centres hard, disrupt international supply chains and increase the cost of manufacturing drugs, and endangers patient care.
According to a report by German television channel 1 on September 27, german Chemical Industries Association chief executive Wolfgang Grosse-ntroup criticised the White House drug tariffs as a sign that “Us-eu trade relations have fallen to a new low”. The President of the German Association of R & D Pharmaceutical Companies has warned that US drug import tariffs will have serious consequences for the international pharmaceutical supply chain, especially increasing the cost of drug production for European companies, would be a serious setback to Germany’s and Europe’s position as a global pharmaceutical hub.
Germany’s pharmaceutical industry is heavily dependent on the US market. According to the Statistisches Bundesamt, the country 2024 $27bn worth of drugs to the US, about a quarter of its total pharmaceutical exports. The German pharmaceutical industry is even more dependent on the US market than the machinery and chemical industries. Jasmina Gustav Kirchhoff, an expert at the German Institute of Economic Research, said that the US had long been seen as a lucrative market for the German pharmaceutical industry, and the new tariffs had put pressure on the German economy.
If the U. S. Market is hindered by tariffs, German production could be constrained by a lack of economic viability. Thomas Price, president of the German Association of Pharmacists (Abda) , warned that in recent years, instability in the drug supply chain has led to repeated shortages of some drugs, forcing many German patients to seek alternative products.
Some pharmaceutical companies took action in response to the tariffs, and Bayer said he would continue to work constructively with the US government. Bischofberg, an analyst at Vontobel asset management in Switzerland, believes that the presence and significant investments announced by many Big German pharmaceutical companies in the US could protect their medicines from the tariffs.
The Swiss pharmaceutical industry also expressed disappointment. René Buholzer, managing director of the Swiss Association of Interpharma, a group of 23 research-based pharmaceutical companies, said no global drug had ever been subject to such tariffs, there is no point in stressing the need to provide more expensive products to seriously ill patients. The association has gone to great lengths to prevent this“Paradigm shift”.
Big Swiss pharmaceutical giants such as Hoffmann-la Roche and Novartis could evade tariffs by expanding in the US, but small businesses could be badly affected, according to researchers at the ITIF think-tank. The Swiss mechanical engineering and watch industries already face similar high tariff pressures.
Ireland’s pharmaceutical exporters could also be hit hard. Ireland exported about $73bn of goods to the US last year, more than half of which were pharmaceuticals or medical products. Natalie more, director-general of the Federation of European pharmaceutical industry associations, worries that tariffs could increase costs, disrupt supply chains and prevent patients from receiving life-saving treatment.
Europe faces rising risks of drug shortages and price rises. German“Berlin Messenger” said that Germany is currently about 450 kinds of drugs out of stock, including cough and fever syrup for children, painkillers and antibiotics. Price warned that pharmaceutical companies could be forced to cut production or raise prices if European companies cut sales to the US.
Swiss television station SRF said Novartis chief executive officer in an interview, raised the idea of European drug prices to make up for the loss of the U. S. market. Some are already doing so: French drugmaker Sanofi has cut the price of insulin in the US but raised it in Europe, while Lilly has raised the price of weight-loss drugs in the UK by 170 per cent.