US President Donald Trump’s recent announcement of 100% tariffs on imported branded and patented medicines, effective October 1, has sparked concerns about the impact on healthcare access and costs in America. The move aims to boost domestic manufacturing, but it may lead to higher prices for patients and increased costs for the healthcare system.
The tariffs will apply to medicines from countries without trade agreements capping tariffs, such as the UK, Switzerland, and Singapore. In contrast, the European Union and Japan have secured limits on US tariffs, with a 15% cap on pharmaceuticals. Germany has confirmed it expects a 15% tariff rate for pharma products.
Indian pharmaceutical companies, which primarily export generics to the US, may be spared for now. However, uncertainty lingers over potential tariff expansion to complex generics and Active Pharmaceutical Ingredients (APIs). If included, this could significantly impact India’s $10.5 billion pharma exports to the US.
The key concerns are that higher prices for patented medicines could lead to increased healthcare costs, affecting patients and the health insurance sector. An Ernst & Young study estimated that a 25% tariff on patented drugs would raise annual drug costs by $51 billion.
There are chances the traffics will disrupt global supply chain potentially leading to shortages of critical medicines.
PhRMA, the influential body representing the US pharmaceutical industry, warned that tariffs would raise costs for patients without addressing structural supply chain issues.
Also patented medicines like Novo Nordisk’s weight-loss drug Wegovy and diabetes drug Ozempic, manufactured in Denmark, may face tariffs.
Also medicines like Eisai’s cancer drug Lenvima, manufactured in Japan, and Novartis’ heart-failure medicine Entresto, produced globally with key stages in Switzerland.
BioNTech and Pfizer’s COVID-19 vaccine Comirnaty, manufactured in Germany and Belgium, and GSK’s vaccine Arexvy, with ingredients made in Belgium and France.
The tariffs announced by POTUS will have global implications with nations heavily dependent on US demand may need to accelerate alternative trade alliances and diversify export markets.
In the India’s Pharma Sector, while Indian generics are spared for now, the sector may need to adapt to changing trade dynamics and explore new markets.
