Trump Proposes Major Tariffs on Imported Generic Medicines

President Donald Trump has announced a significant tariff on imported generic medicines, set to take effect in August 2028, unless manufacturers relocate production to the US. This move aims to boost domestic pharmaceutical manufacturing but could have serious implications for India, the largest supplier of generic drugs to the US. The tariffs may affect over 40% of India's pharmaceutical exports, raising concerns about the availability of affordable medicines. As the White House navigates ongoing tariff policies, the impact on both US and Indian markets remains to be seen. Read on to learn more about the potential consequences of these new trade measures.

By Narendra Chaudhary Jul 22, 2026, 07:32 IST

New Tariff Announcement by Trump

On Tuesday, President Donald Trump declared that a 100% tariff will be imposed on imported generic medications starting August 2028, unless manufacturers relocate their production to the United States. This tariff is set to increase to 200% the following year. In a message on Truth Social, Trump stated that generic drug producers would have a two-year window to move their operations to the US or face the import tax. He emphasized that this initiative aims to bring generic pharmaceutical production back to America, penalizing companies that fail to establish manufacturing facilities within the specified timeframe.

This announcement is part of Trump's larger strategy to motivate pharmaceutical firms to increase domestic production of medicines. His administration initiated a national security review of pharmaceutical imports in April 2025 under Section 232 of the Trade Expansion Act. Trump also confirmed that previously announced tariffs on patented medications would remain unchanged, which could include duties of up to 100% on certain imported drugs, although some significant exceptions are anticipated.

Generic drug manufacturers typically operate on slim profit margins and depend on global supply chains, making it challenging to absorb increased import costs. Major pharmaceutical companies like Merck & Co. and Eli Lilly & Co. have already negotiated agreements with the Trump administration to evade some proposed tariffs on patented drugs. However, generic manufacturers have fewer options available to them. Richard Saynor, CEO of Swiss generic drugmaker Sandoz Group AG, cautioned last year that heightened US tariffs could lead to increased medicine prices and limit patient access. Sandoz, along with competitors like Teva Pharmaceutical Industries Ltd. and Viatris Inc., produces many of its generic medicines outside the US, including in Canada and Austria.

Impact on India

The proposed tariffs could significantly affect India, which is the largest supplier of generic medicines to the US. According to the Indian Commerce Ministry, pharmaceutical exports to the US reached $10.5 billion during the 2024-25 financial year, making this sector one of India's top three exports to the American market. Reports indicate that tariffs on pharmaceutical products could impact over 40% of India's exports to the US, compounding existing tariffs on steel, aluminum, and automobiles. However, it is still uncertain how much of the proposed tariff would apply to Indian generic medicines. A trade agreement between Washington and New Delhi in February indicated that India would receive negotiated outcomes regarding generic pharmaceuticals and ingredients.

Concerns Over Affordable Medicines

Previous tariff proposals have raised alarms about the availability of low-cost medicines imported from India. An earlier analysis by Bloomberg News, utilizing data from healthcare intelligence firm Symphony Health, indicated that commonly prescribed oral contraceptives, medications for hypertension, and treatments for depression could be among the most affected products. The analysis revealed that approximately 65% of all birth control pill prescriptions dispensed in the US in 2024 were produced by two Indian companies, Glenmark Pharmaceuticals Ltd. and Lupin Ltd.

Ongoing Tariff Developments

In a separate matter, the White House is working on replacing the administration's emergency tariffs following a ruling by the US Supreme Court earlier this year that deemed the previous measures unlawful. The current blanket 10% tariff is set to expire on Friday.