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Trump's 100% tariff on patented drugs and ingredients may have limited impact immediately, say reports
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Our Bureau, New Delhi
April 04 , 2026
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The US President Donald J Trump's proclamation imposing 100% tariff on patented pharmaceuticals and their ingredients may have limited impact on the Indian pharma industry at present, according to experts. While the generic pharmaceutical products, biosimilars, and associated ingredients are not subject to tariffs at this time, "this will be reassessed in one year," says the US administration.
The tariffs will come into effect within 120 days for certain large companies, and 180 days for smaller companies. For companies that enter into Most Favoured Nation (MFN) pricing agreements with the Department of Health and Human Services (HHS) and onshoring agreements with the Department of Commerce, a 0% tariff will apply through January 20, 2029. For companies that only enter into onshoring agreements with the Department of Commerce, a 20% tariff will apply, said the White House detailing the imposition of tariffs.
According to this, if a pharmaceutical product is from the European Union, Japan, Korea, or Switzerland and Liechtenstein, a 15% tariff will apply. If a pharmaceutical product is from the United Kingdom, a lower tariff will apply, subject to the recently concluded UK pharmaceutical agreement.
Orphan drugs, drugs for animal health, and certain other specialty pharmaceutical products will be exempt, if they are from trade deal countries or meet an urgent public health need.
According to news reports quoting trade and industry experts, the decision at present will have limited impact on the Indian firms, since almost 90 per cent of the country's pharma exports to US are generics. However, there could be a long term impact on the raw material manufacturers, contract manufacturers and global supply chain.
However, reports suggest that some of the Indian companies that sell branded, speciality drugs and the exporters of raw materials for patented products in other parts of the world may see an impact of the decision in short term.
A news report quoting brokerage firm Jefferies says that Sun Pharma, with almost 20% of its revenue attributed to patented medicines produced in other parts of the world, is among the Indian companies that may have an impact owing to the decision. According to HSBC analysis earlier, almost 85-90 per cent of the company's global sales of $1.22 billion from patented products in FY 25 were to US market. The share prices of the company declined from around Rs. 1,728 per share to around Rs. 1,646 per share following the announcement before closing at Rs. 1,694.65 per share with a 1.96 per cent decline from the previous close of Rs. 1,728.45 per share, according to the BSE.
The White House, while announcing the imposition of tariffs on April 2, has said that the decision was made after conducting an extensive investigation under Section 232 of the Trade Expansion Act of 1962, to determine the effects of imports of pharmaceuticals, pharma ingredients and related products, on national security.
"The investigation found that patented pharmaceuticals and associated pharmaceutical ingredients are being imported into the United States in such quantities and under such circumstances as to threaten to impair our national security," it said.
"The impending Section 232 tariffs have already spurred approximately $400 billion in new investment commitments from US and foreign pharmaceutical companies, which will be spent in the United States during President Trump’s current term in office," it added.
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