Cipla‘s CEO stated on Friday that tariffs should not dictate the operations of Indian pharmaceutical companies as the industry anticipates U.S. President Donald Trump’s proposed taxes on drug imports.
India, known as the “pharmacy of the world,” is a major exporter to the U.S., particularly for affordable generic drugs.
“I’m not sure tariffs should dictate what we should be doing as players, because there is a risk that four years later, those tariffs may go away,” Cipla Global CEO Umang Vohra said at the Global Pharmaceutical Quality Summit in Mumbai.
“So by the time you build a plant, tariffs have gone away. Now you have a plant sitting there, right? So I just think we should take a more holistic view.”
Trump has indicated he may impose tariffs of 25% or higher on pharmaceutical imports, with an announcement expected next month. He has also urged companies to relocate manufacturing to the U.S. to avoid these duties.
Most pharmaceutical firms are waiting for further details on the potential tariffs.
“I don’t know how much difference it (tariffs) will make to us… and will not justify relocating our manufacturing,” said Sun Pharma MD Dilip Shanghvi.
“Ultimately, it (tariff impact) will be passed on to consumers,” Shanghvi said.
Industry experts note that India imposes a roughly 10% tax on pharmaceutical imports from the U.S. while facing minimal duties on its drug exports to the U.S.
With extensive factory clusters producing cost-effective generic versions of complex drugs, India exports to more than 200 countries, with the U.S. as its largest market, according to government data.
Research firm IQVIA reports that in 2022, nearly half of all generic medicine prescriptions in the U.S. came from Indian manufacturers, contributing to an estimated $408 billion in healthcare savings.
Earlier this week, Dr. Reddy’s MD GV Prasad told Reuters that Indian pharmaceutical firms are expected to remain competitive in the generics market even if Trump imposes import duties.
He also noted that relocating manufacturing to the U.S. would not be feasible due to insufficient capacity and higher costs.