Indian Pharma Companies to Maintain Market Share in US Despite Potential Tariffs

Indian pharmaceutical companies are expected to retain their dominance in the generic drug market in the United States even if President Donald Trump imposes high tariffs. The Pharmaceutical Export Promotion Council of India (Pharmexcil) believes that Indian exports are highly competitive and will continue to be competitive in the US market.

The US accounts for approximately one-third of India's pharmaceutical exports, primarily generic versions of popular drugs. Last fiscal year, sales grew by 16% to approximately $9 billion.

Despite Trump's threat to impose tariffs of 25% or more on pharmaceutical imports, India's drug industry remains optimistic. Pharmexcil believes that Trump's statements are mainly aimed at imports of patented and other expensive products from other countries.

"India pharma will not selectively be imposed high duties, and its exports are highly competitive, so it can still compete in the newer environment (with import duties if at all imposed) without losing its share," said Pharmexcil Director General Raja Bhanu.

Currently, India imposes a 10% tax on pharmaceutical imports from the US while facing minimal tariffs for its exports to that country. India accounts for roughly 65% of all generic drug sales in the US, which are significantly cheaper than branded versions.

Analysts warn that higher tariffs could further reduce profit margins for Indian generic drug companies unless costs are passed on to consumers. However, Pharmexcil remains confident that the Indian government will negotiate the best possible solution.

If US tariffs lead to companies exiting the generic drug market, it could result in drug shortages and higher drug prices in the US. According to IQVIA, cheaper generic drugs saved the US healthcare system approximately $408 billion in 2022.

Major Indian players in the US generic drug market include Sun Pharma, Dr Reddy's, Cipla, and Zydus Lifesciences. Uncertainty surrounding tariffs is expected to be a key topic of discussion at the BioAsia conference in Telangana, India, next week.