Indian drug industry leaders have complained that potential US tariffs on Indian generic drug exports could result in increased drug prices for American consumers and potential shortages. Industry officials contend that Indian generics account for a big portion of US healthcare cost savings, and the imposition of tariffs would interrupt the supply chain without a hoped-for effect.

Key Highlights:
Tariffs' Effect on Drug Affordability

• Sun Pharma Chairman & MD Dilip Shanghvi said that a 10-25% tariff on Indian generics would raise the cost of drugs for US consumers, as manufacturers have thin profit margins to bear such expenses.

• Sun Pharma's US sales contribute 32% of its ₹47,800 crore revenue, so the impact of the tariff would be significant.

Industry Backlash Against US Manufacturing Shift

• Cipla CEO Umang Vohra pointed out that Indian generics reduce US healthcare expenditure and instead of tariff hikes, argued for waiving tariffs.

• He pointed out that establishing US manufacturing facilities to evade tariffs is not economical.

India's US Pharmaceutical Trade Balance

• The US imports more than $9 billion worth of Indian medicines every year, compared to only $800 million worth of US medicines imported by India.

• 60% of US drug imports into India are already tariff-free, and exempting the remaining 40% would have negligible revenue effect, states the Indian Pharmaceutical Alliance (IPA).

Economic Impact of Indian Generics on US Healthcare
IQVIA study results:

• Indian generics reduced the US healthcare system by $219 billion in 2022 and $1.3 trillion from 2013-2022.

• 60% of hypertension drug prescriptions in the US originate from 23 Indian firms, saving $25.3 billion in 2022 alone.

Industry Leaders Statements:

• Dilip Shanghvi, Chairman & MD, Sun Pharma:

"A 10-25% tariff will increase drug prices marginally but will not warrant shifting manufacturing. The additional cost will eventually be passed on to US patients."

• Umang Vohra, CEO, Cipla:

"Indian generic drugs are the only part that slashes US healthcare expenditure. It is hard to justify taxing them."

As the US government weighs imposing reciprocal tariffs, Indian pharma industry leaders have called for policy talks to maintain the affordability of generics. Trade groups are clamoring for tariffs on US importation of medicines to offset duties imposed, preventing any disruption of affordability and supply of life-saving medicines in the US market.