International Tax Panorama

Starting from October 1, the United States will impose a 100% tariff on imports of branded or patented pharmaceutical products. , Unless the company is building a manufacturing plant in the US, President Donald Trump said on Thursday.

A 100 percent tariff means that the prices of imported pharmaceutical products will double for American importers and consumers.

However, Trump said an exception would be made for any company that is building its Pharmaceutical Manufacturing Plant in America.

He explained that “is building” refers to “‘breaking ground’ and/or ‘under construction’.”

Trump did not specify whether the new tariffs he is announcing will be applied in addition to the national tariffs he has previously imposed on various US trading partners.

In 2024, America imported nearly $233 billion worth of pharmaceutical and medicinal products, according to the Census Bureau. The prospect of prices doubling for some medicines could send shock waves through voters, as healthcare expenses, including the costs of Medicare and Medicaid, may increase significantly.

Several prominent Indian pharmaceutical firms, including Sun Pharma, Dr. Reddy’s Laboratories, Cipla, Lupin, Aurobindo Pharma, and Zydus Lifesciences, maintain substantial export operations to the USA.

While Indian pharmaceutical companies should not, therefore, be overly affected, the new tariffs merely add to the weight of the 50 percent tariffs imposed on other Indian sectors by Trump earlier in the year. These were, in part, due to India’s continued purchase of Russian oil, Trump said.