Patented medicines remained a key part of the latest statement from US President Trump – citing a report from his Commerce Secretary who had investigated the impact of US imports of pharmaceuticals and pharma ingredients on their national security – under Section 232 of the Trade Expansion Act (1962). The statement said, “… the present quantities and circumstances of imports of pharmaceuticals and pharmaceutical ingredients threaten to impair the national security and economy.” Further, it added, according to the Food and Drug Administration, “as of 2025, approximately 53 per cent of patented pharmaceutical products distributed domestically are produced outside the country. The degree of import reliance is significant at the API (active pharmaceutical ingredient) level, with only 15 per cent of patented APIs by volume domestically produced for the United States market.”
The US President’s statement, meanwhile, has indicated that the tariff would be zero for companies that have MFN (most favoured nation) pricing, up to January 20th, 2029. ( MFN pricing pegs US prices on par with the lowest international price on the same product).
On generic drugs, the US President’s statement indicated his decision “not to adjust imports of generic pharmaceuticals and their associated ingredients, including biosimilar products, at this time. This determination includes purchases of generic pharmaceuticals and ingredients for the Strategic API Reserve. I find that such products should not be subject to section 232 tariffs at this time.”
The generics status could change in a year, he said, if the administration found circumstances that indicated a need to take action on generic pharmaceuticals and associated ingredients as well.
Generic exports
The US is a key export market for several large Indian drugmakers, including Sun Pharma, Dr Reddy’s Laboratories, Lupin, Glenmark and Zydus Lifesciences. Generic drugs are critical in improving access to affordable medicine in the US, industry representatives point out. India exports about $ 10 billion worth of medicines to the US.
On the impact for Indian drug companies, only Sun Pharma looks to get impacted, as its innovative drug sales are over 50 per cent of its US sales (about 30 per cent of its revenues), said Vishal Manchanda, Senior Vice-President (Institutional Research) with Systematix Group, told businessline. That is small in the US innovative drugs market, estimated at $ 350 billion, he pointed out.
Pharma company representatives also point out that discussions on tariffs and MFN pricing are focused on patented drugs from big pharma companies (Novo Nordisk, AstraZeneca, Novartis, Eli Lilly, Pfizer).
An industry veteran added that more clarity was needed for multiple reasons — contract manufacturing and development companies making pharma ingredients for innovators could be impacted. There are multiple caveats, even on big pharma, which have deals to manufacture in the US or have promised to bring down drug prices. Several countries are in trade deals with the US or in discussions, and the tariffs themselves are being legally challenged in the US, the industry-watcher pointed out.
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Published on April 3, 2026