Reciprocal tariffs may make Indian generic drugs costlier in US: Pharma giants on Trump stance

pharmaceutical industry say levying tariffs may make generic drugs marginally costlier for the US patients and even lead to drug shortages.

Dilip Shanghvi, chairman and managing director at Sun Pharma, India's largest drug maker by sales and market cap, told an industry gathering that his company sells products between $1 and $5 per bottle in the US and a tariff of 10% or 25% may marginally change that cost. «Possibly it will not justify relocating manufacturing,» Shanghvi said, responding to Trump's frenetic calls to either set up manufacturing bases in the US or face tariffs.
He added the profit margins for drugs sold in the US are so low that the ability to absorb tariffs is limited. «Ultimately it will get passed on to the consumers,» he noted. For FY24, Sun Pharma had 32% of its total sales of ₹47,800 crore from the US, a notch higher than 31% that came from its home market India.

Umang Vohra, global CEO at Cipla, the third largest drug maker in India, asked for a holistic view of the tariff issue. He noted the quantum of imports of pharmaceutical products from the US to India is not significant. «If a big medicine brand (from US or Europe) is sold in India at a very high price, a large section of our society cannot afford it...Tariffs (in India) are in any case between 0% and 10% and on most lifesaving drugs it is nil» he said.

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