As US President Donald Trump plans to impose tariffs on pharmaceutical imports, Dr Reddy’s Managing Director GV Prasad maintained that the Indian drugmakers are likely to remain competitive in the generic drugs market.
The Indian pharmaceutical industry is still waiting for more clarity on any tariffs before taking any action given a lack of details, Prasad said on the sidelines of the BioAsia conference in Telangana, as reported by Reuters.
The tariffs would likely raise costs for U.S. consumers or middlemen, he added.
“In reality, to shift all these products from worldwide into the United States is not practical. They don’t have that much capacity, and their costs will rise. Even with tariffs, I think Indian and Chinese companies would be competitive.”
Earlier this month, the US President said that he intends to impose a “25% or higher” levies on semiconductors and pharmaceutical imports, and raise it substantially over the course of a year.
According to the government-backed trade body Pharmaceuticals Export Promotion Council of India (Pharmexcil), most Indian generic drugmakers count the U.S. as their largest market, with exports reaching $8.7 billion in fiscal 2024, or about 31% of the industry’s overall exports.
It is noteworthy that India’s drugmakers export generic drugs to the U.S., offering a cost-effective alternate to expensive innovative drugs. Nearly half of all generic prescriptions filed in the U.S. in 2022 were supplied by Indian drugmakers. Generic drugs, overall, generated $408 billion in savings for the U.S. healthcare system for the year, according to research firm IQVIA.
Companies like Sun Pharma, Dr. Reddy’s, Cipla, Biocon, Lupin, Glenmark Pharma and Zydus rely heavily on the U.S. market. Dr. Reddy’s Laboratories consolidated net profit increased 2 per cent to Rs 1,413 crore in the third quarter ended December 31, 2024. Interestingly, the growth was driven by robust performance across markets.
