White House shelves tariffs on generic drugs, sparing bitter pill for American patients and Indian pharma companies

The TOI correspondent from Washington: The Trump White House has shelved plans to impose tariffs on generic drug imports in a retreat that will come as a relief to Indian pharmaceutical companies , which account for nearly 50 per cent of generic prescriptions in the US .

As importantly, it has also calmed millions of Americans who were on tenterhooks because they depend on imported generics, mainly from India, to manage health issues ranging from hypertension to depression, ulcers to high cholesterol.

Sometimes dubbed a “pharmacy to the world,” India is the largest single source of generic prescription drugs for the US market, far exceeding domestic producers (30% share) and other foreign suppliers. According to IQVIA, the world's leading medical data analytics company, India supplies 47 percent of all generic prescriptions filled in the US pharmacies.

The decision not to impose tariffs on generics represents a major scaling-back of the scope of the Commerce Department’s tariff investigation into pharmaceuticals, the Wall Street Journal, which first reported the White House decision on Wednesday, said. When the pharmaceutical tariff probe was announced in April, the Federal Register notice specified that the investigation would target “both finished generic and non-generic drug products,” as well as drug ingredients.

The White House drawdown comes after a fierce internal battle in the MAGA sphere, with hardliners pressing for tariffs to bring back pharmaceutical manufacturing to the US, citing national security concerns. But members of President Trump’s Domestic Policy Council reportedly argued that applying tariffs to generic medications would result in price increases and even drug shortages for consumers. They also maintained that tariffs wouldn’t work for generics because they are so cheap to produce in countries such as India that even very high tariffs might not make US production profitable.

The MAGA dispensation has tied itself into knots over Trump’s trade wars and tariff fixation. Buying into his fixation over tariffs has not only resulted in China throttling back on rare earths, but Beijing’s boycott of US agri products, especially soya beans, the mainstay of US agricultural export, has devastated American farmers. The administration is now doling out $ 16 billion in farm aid, ostensibly from tariffs it is collecting from other imports, the bill for which will eventually be paid by the American consumer, according to most economists.

Essentially, the government is collecting money from us and giving the same right back to us, one farmer raged on social media, which is replete with sob stories of soy farmers who are being trolled by liberals for backing Trump.

Clearly, the Trump White House did not want to deliver more bitter medicine to the American people, many of whom never bought into the snake oil that was served to them about tariff revenue. By some estimates, Indian-made generic medicines saved the US healthcare system an estimated $219 billion in 2022 and $ 1.3 trillion over the past decade.

In 2022, Indian companies such as Cipla, Sun Pharmaceuticals and Dr Reddy laboratories, supplied more than half of the prescriptions for five of the top ten therapeutic areas in the US by volume including drugs for lowering cholesterol, hypertension, depression, anti-ulcerants, and nervous system disorders. Generic versions of popular medications within these categories—like Metformin (diabetes), Atorvastatin (cholesterol), Losartan (blood pressure), and various antibiotics (like Amoxicillin and Ciprofloxacin)—are among the top general medicines exported from India to the US and prescribed for American patients. For now, they can keep the blood pressure at bay for the same low cost that generic medications allow.