Athira Sethu
Kochi, 22 July 2026
The shares of some Indian pharmaceutical companies such as Sun Pharma, Dr. Reddy’s Laboratories, Lupin, Aurobindo Pharma, and Cipla dropped on Wednesday after US President Donald Trump revealed plans to levy huge tariffs on generic drugs imported into the US.
As per the US president’s statement, the generic drugs imported into the US will be subject to 0% tariffs until 2 years after 1st August 2026. This will be followed by a 100% tariff for the next one year, after which it will be levied to 200%. The reason behind this plan is to make the pharmaceutical companies manufacture their products within the US, rather than manufacturing and exporting from other nations.
President Trump stated that his policy would help in manufacturing of drugs within the nation while leaving all other policies related to branded and patented medicine alone.
What are Generic Drugs?
Generic drugs are the medicines containing the same active ingredients as that of the branded medicines. These medicines act in the similar manner, provide the same benefits to health and meet the same standards of safety and efficacy. However, the only difference is that the cost of these medicines is significantly reduced.
The pharmaceutical company invents a new medicine and markets its branded version by acquiring patents. After the expiration of patents, the other pharmaceutical firms can manufacture the same medicines as generics. Prior to their approval, these medicines have to be shown to be equivalent to their original versions in terms of efficacy.
Why are they cheaper?
The generic drug manufacturing companies don’t have to invest millions of dollars in development, huge clinical tests, and marketing of their products since these expenses are much less. As a result, generic medicines can be produced at much lower prices than branded medicines.
Why is it significant for India?
India is the largest producer and exporter of generic medicines. Firms like Sun Pharma, Dr. Reddy’s, Cipla, Lupin, and Aurobindo Pharma are supplying a substantial volume of generic medicines in the United States market. With the implementation of proposed tariffs, the export of medicines from India will become more costly.
