Synopsis
The United States is set to raise tariffs on pharmaceutical imports, particularly from China, as Commerce Secretary Howard Lutnick emphasizes the need for domestic production of essential medicines. This move follows President Trump's announcement of significant tariffs on imported drugs, which could impact drug prices and availability.Key Takeaways
- US plans to hike tariffs on pharmaceutical imports from China.
- Commerce Secretary Howard Lutnick stresses the need for domestic production.
- President Trump announces major tariffs on imported drugs.
- Over 45% of US generic drugs are sourced from India.
- Rising tariffs could lead to drug shortages and higher prices.
New Delhi, April 13 (NationPress) The United States is gearing up to increase tariffs on pharmaceutical products, particularly those imported from China, within the next month or two, as stated by Commerce Secretary Howard Lutnick during a recent media interview.
"We cannot depend on China for essential items like our medications and semiconductors, which should be manufactured in America," Lutnick emphasized.
"We should not be reliant on foreign nations for critical needs," he added.
This announcement follows President Donald Trump’s remarks at the National Republican Congressional Committee, where he indicated that a significant tariff on imported drugs would be introduced soon.
"This is not a permanent exemption; it's a clarification that these must not be subjected to negotiations by other countries. These are critical national security items that we must produce in America," Lutnick clarified.
Historically, pharmaceuticals have been excluded from the broader U.S. tariff framework, as the nation relies on affordable generic drugs from countries like China and India to support its healthcare system. This is particularly beneficial because U.S. multinationals often market the same medications at exorbitant prices that are frequently unaffordable for average consumers.
Given the ongoing trade conflict with China, drug exports from the communist nation are clearly the primary target. This could lead to a heightened reliance on Indian generic drugs in the short term, according to industry insiders.
Over 45 percent of the generic drugs utilized in the U.S. are produced in India. Major Indian pharmaceutical companies, including Dr Reddy's, Aurobindo Pharma, Zydus Lifesciences, Sun Pharma, and Gland Pharma, derive up to half of their revenue from American customers.
The pharmaceutical sector in India is intricately connected to the United States. In FY24, the U.S. represented $8.7 billion of India’s total $27.9 billion pharmaceutical exports, according to the Pharmaceuticals Export Promotion Council of India.
The U.S. heavily relies on low-cost Indian generics, and raising duties would likely increase prices and trigger shortages of crucial drugs, particularly antibiotics and common treatments.
Furthermore, India is involved in discussions with the U.S. regarding a bilateral trade agreement. The availability of essential generic medications at low prices for American consumers is expected to be a key consideration in these negotiations.
