Weaponising Health: US. Tariffs On Imported Medicines

The U.S. government under President Donald Trump has announced 100% tariffs on imported branded and patented medicines from October 1.

Background

  • Prescription drugs account for around 10% of household medical spending in the U.S.
  • While imports from the EU and Japan face only a 15% tariff cap, other countries face 100% tariffs — creating unequal trade conditions.

Key Features of the Tariff Policy

  • 100% Tariffs on patented and branded drugs from non-exempt countries.
  • 15% Cap on imports from EU and Japan (covering ~75% of U.S. pharma imports).
  • Affects high-value drugs like Wegovy and Ozempic (for diabetes and weight loss).
  • Potentially impacts specialised drugs for cancer and rare diseases.

On U.S. Consumers and Healthcare

  • Higher drug prices → Increased medical bills.
  • Insurance premiums may rise as companies pass costs to customers.
  • A study by Ernst & Young estimates a 25% tariff could raise drug costs by $51 billion annually — 100% tariffs will worsen it.

On Global Pharma Trade

  • U.K., Switzerland, and Singapore face heavy impact due to high exposure.
  • Could disrupt supply chains and raise prices globally.
  • Reflects growing protectionism in global trade.

On India

  • India’s generics industry is currently exempt.
  • India exports $10.5 billion worth of generic formulations to the U.S.
  • If tariffs extend to generics or APIs, India’s export sector could face serious losses.
  • Creates uncertainty over API imports, where India and China are major suppliers.

On U.S. Pharma Industry

  • The U.S. is a major exporter of innovative medicines.
  • Tariffs may distort competitiveness and affect U.S. exports.

Wider Implications

  • Marks a shift towards economic nationalism and trade weaponisation.
  • Challenges post-WWII global supply chains.
  • Countries must diversify export markets and form new alliances.
  • India should explore alternative markets and regional trade agreements.

Conclusion

The U.S. tariff move risks making healthcare costlier, disrupting pharma trade, and reshaping global supply chains. For India, it is a warning to reduce dependence on single markets, strengthen domestic capabilities, and seek diversified export strategies for long-term stability.

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