President Donald Trump announced Tuesday a phased tariff plan for imported generic drugs: no duties through July 2028, followed by a 100% rate beginning that August, then a doubling to 200% twelve months after that.
Tariffs on imported generics would rise to 100% in August 2028 and 200% a year later, threatening a supply chain that fills more than 90% of U.S. prescriptions
Mandel Ngan / AFP via Getty Images
President Donald Trump announced Tuesday a phased tariff plan for imported generic drugs: no duties through July 2028, followed by a 100% rate beginning that August, then a doubling to 200% twelve months after that.
Trump, posting on social media, cast the escalating rate structure as "a penalty" aimed at manufacturers that fail to establish domestic production capacity before the grace period expires, framing the overall measure as a reshoring initiative for generic pharmaceuticals. Tariffs on patented and branded drugs will remain unchanged, he said.
Generic drugs account for more than 90% of U.S. prescriptions, according to the U.S. Food and Drug Administration. Most are manufactured at facilities in India, Europe, and China, according to Bloomberg.
India stands to be hit hardest. The country's pharmaceutical companies supply nearly 50% of all generic medicines consumed in America, and pharmaceuticals rank among India's top exports to the U.S., totaling $10.5 billion in 2024-25, according to Bloomberg. The NSE Nifty Pharma index of 20 Indian drugmakers fell as much as 1.9% in Mumbai trading on Wednesday.
Deborah Elms, head of trade policy at the Hinrich Foundation, cautioned that establishing pharmaceutical manufacturing inside the U.S. is neither simple nor cheap, and that the raw materials and components would largely continue to be sourced from other countries, according to CNBC. "I am not sure that even a potential 200% tariff will change the fundamental math," Elms said.
Nathan Gray, senior research fellow at the Institute for International Trade at Adelaide University, argued that relocating production to the U.S. would strip away the pricing edge that foreign generics makers enjoy relative to their branded competitors. "This decision will lead to reduced access to generic medicines in the U.S. because they won't be able to make them as affordable," Gray said. "It'll push them into higher pricing."
Sandoz Group AG, one of the world's largest generic producers, said it had not yet been able to evaluate what the tariffs would mean for its business. In an emailed statement, the company said: "We share the goal of improving affordability and access to medicines in the United States." Sandoz stock fell as much as 4.2% in Zurich on Wednesday.
The announcement fits into a broader administration push on drug pricing. Trump expanded the TrumpRx.gov prescription discount platform to include more than 600 generic medications in May, adding common drugs such as cholesterol and blood pressure treatments through partnerships with Amazon $AMZN Pharmacy, GoodRx, and Cost Plus Drugs. More than a dozen major drugmakers, including Eli Lilly $LLY, Pfizer $PFE, and Novo Nordisk, have also struck deals with the administration to lower drug prices under its most-favored-nation pricing policy, exempting those companies from tariffs for three years.
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