US President Donald Trump has urged pharmaceutical companies to shift manufacturing to the US as the tariffs on drug imports are approaching, as per a report by Bloomberg. His statement has left both the American and Indian drugmakers struggling for solutions. Meanwhile, US industry leaders are seeking support for easing drug pricing regulations whereas Indian pharmaceutical firms are relying on bilateral discussions to avoid heavy levies on their exports.
Trump tough talks with Pharma players
During a White House meeting, Trump met with top executives from Pfizer, Eli Lilly, and Merck who wished to convince him to roll back a law that permits the government to negotiate drug prices. The industry advocates that current policies will alter drug development incentives and will lead to an increase in patient costs.
However, Trump continues to be firm and has refused to make changes to the program. Instead, he reinstated concerns that Americans are paying extra for medications in comparison to other countries. ‘’I hope you focus really a lot on the cost too, because Americans have been screwed, and it’s not good, not going to put up with it,’’ Trump stated at the White House, as reported by Blomberg.
Medicare officials have announced that the next round of price negotiation will proceed and will discuss high-profile drugs like Wegovy and Ozempic. This indicates that pharmaceutical executives’ efforts to persuade policy may not be making any progress.
Trump’s tariff impact on Indian pharma industry
Trump’s tariff warning has created shockwaves through India’s pharmaceutical industry, which supplied almost half of America’s generic drugs. Indian pharma exports to the US amounted to $8.7 billion in fiscal 2024, making the country a crucial player in the global drugs supply chain.
The Indian Pharmaceutical Alliance (IPA) which includes major drugmakers like Sun Pharma and Dr. Reddy’s anticipates that diplomatic talks will avert the tariffs. IPA Secretary General Sudarshan Jain stated to Reuters, ‘’ This matter will be discussed through bilateral meetings between the two countries and further steps will be decided accordingly’’.
Analysts warn that implementing tariffs could result in an increase in the drug price in the US. ‘’ This decision is going to be inflationary as they don’t have the required manufacturing infrastructure in-house to replace the scale of supply that India does,’’ Vishal Manchanda, an analyst at Systematix Institutional Equities, told Reuters.