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US President Donald Trump has announced a phased tariff plan for imported generic medicines, giving drugmakers two years to shift production to the United States before facing steep import duties.
In a Truth Social post, Trump said all generic drugs brought into the US would continue to face a 0% tariff from August 1, 2026, for two years. The tariff would then rise to 100 per cent for one year before increasing to 200 per cent thereafter.
“Effective August 1st, 2026, all Generic Drugs being brought into the United States will continue to have a TARIFF of ZERO PERCENT for a two year period of time, after which the TARIFF will be raised to 100 per cent for a one year period of time, and 200 per cent thereafter,” Trump wrote.
He said the move was intended to “RESHORE Generic Pharmaceutical Production into America” and penalise companies that do not build plant and equipment within the stated period. Trump added that the objective of the policy was to protect people in the United States and claimed pharmaceutical facilities were being built “at a level never seen before” across the country.
Trump also said the policy on patented, branded or innovative drugs, which he described as successful, would remain unchanged.
What Trump’s generic drug tariff plan means
Under the timeline outlined by Trump, imported generic drugs will remain exempt from tariffs until July 31, 2028. A 100 per cent tariff would then apply for the following year, before the rate rises to 200 per cent from August 1, 2029.
The policy would significantly raise the cost of importing generic medicines into the US unless manufacturers move production to the country.
Generic medicines account for a large share of prescriptions in the US and are produced through complex global supply chains. The new tariff plan could therefore have major implications for pharmaceutical companies, suppliers and healthcare costs if the duties are imposed at the announced levels.
Trump has repeatedly argued that the US should reduce its dependence on overseas pharmaceutical production and expand domestic manufacturing capacity. The latest move extends that push to generic drugs, while preserving the administration’s separate approach to patented and innovative medicines.
Trump administration has already targeted pharmaceutical imports
The announcement comes after the Trump administration introduced tariffs on patented pharmaceutical products and associated ingredients earlier this year.
The White House said in April that generic pharmaceuticals, biosimilars and associated ingredients were not subject to tariffs at that time, but that the treatment would be reviewed later. The administration’s broader pharmaceutical tariff policy has been framed around national security and the need to strengthen US supply chains.
The latest announcement extends the administration’s protectionist approach to generic drugs, although the two-year zero-tariff window gives manufacturers more time to adjust their supply chains.
Potential impact on global pharmaceutical supply chains
The proposed tariffs could put pressure on overseas manufacturers that supply the US market, especially in countries such as India, which supplies nearly 30% of the world’s generic medicines and remains the largest manufacturer and exporter of generic drugs.
Companies may have to weigh the cost of relocating production against the expense of paying tariffs of 100% or more. For US consumers, the impact will depend on how manufacturers respond. Companies could absorb some of the additional costs, shift production to the US, or pass higher costs through the supply chain.
Generic medicines are generally lower-priced alternatives to branded drugs. A sharp increase in import costs could therefore raise concerns about the availability and affordability of some medicines if domestic production cannot quickly replace overseas supplies.
The administration has also been pursuing measures aimed at lowering drug prices for Americans. The White House has said its TrumpRx.gov initiative gives consumers access to pricing information and discounts on hundreds of generic medicines.
Why India is watching closely
India is one of the biggest suppliers of generic medicines to the US and other global markets. In March, Union Minister of State for Health and Family Welfare Anupriya Patel told Parliament that India supplies nearly 30 per cent of generic medicines globally and remains the “pharmacy of the world”.
Indian exporters are also looking to diversify into other markets. On July 16, Pharmexcil told Fortune India that India’s pharmaceutical exports to the UK were expected to grow 8.66 per cent to $981.16 million in FY2026-27 after the India-UK Comprehensive Economic and Trade Agreement (CETA) came into force.
The pact provides zero tariffs on nearly all products and is expected to strengthen the competitiveness of Indian generic medicines in the UK market. Pharmexcil said the UK is India’s largest pharmaceutical export market in Europe and the third-largest globally.
India continues to maintain a strong pharmaceutical trade surplus with the UK, which widened to about $767.49 million in FY2025-26, with drug formulations and biologicals accounting for 89.54% of exports.
With improved market access, enhanced regulatory cooperation and a more predictable trade environment under the India-UK CETA, the UK is expected to remain one of the most important growth markets for Indian pharmaceutical exporters.
Trump’s tariff plan now creates a new deadline for pharmaceutical companies operating outside the US to expand domestic manufacturing or prepare for potentially steep import costs. The White House and US trade officials are expected to provide further details on how the tariff plan will apply to different categories of generic medicines and pharmaceutical ingredients.
