U.S. Imposes 100% Tariff on Branded Pharmaceuticals by Choice Institutional Equities
U.S. President Donald Trump has announced a 100% import tariff on branded or patented pharmaceutical products, effective October 1, 2025. This move aims to bolster domestic manufacturing and reduce reliance on foreign imports.
Conditions for Exemption
Trump’s announcement specified that pharmaceutical products would be exempt from the tariff if the company has already begun construction on a U.S. manufacturing facility or if such a facility is currently under development.
Our View
* The 100% U.S. tariff on branded and patented pharmaceutical products could negatively impact Indian pharmaceutical exporters, as the U.S. represents the largest market for Indian pharma, accounting for approximately 35% of exports, valued at USD 10 billion in FY25, according to the Pharmaceuticals Export Promotion Council of India.
* While the tariff primarily targets branded drugs, there is ambiguity over whether complex generics and specialty medicines might also be affected, which could pose challenges for companies relying on U.S. exports. However, firms with manufacturing plants under construction in the U.S. will be exempt, offering an opportunity to mitigate tariff exposure.
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