US President Donald Trump has announced a new tariff policy that could impose duties of up to 200% on generic medicines, as part of his efforts to encourage pharmaceutical companies to manufacture drugs within the United States.

In a post on social media platform Truth Social, Trump said generic drugs would remain under a zero percent tariff for two years from August 1, 2026. However, from August 1, 2028, a 100% tariff will be imposed, which will increase to 200% from August 2029. He said companies that do not shift production to the US will have to pay higher duties.

The move is aimed at boosting domestic generic drug manufacturing and reducing dependence on foreign pharmaceutical supplies. Generic medicines are non-branded drugs whose patents have expired and are usually available at much lower prices compared to branded medicines.

Trump’s announcement has raised concerns among Indian pharmaceutical companies, as the US is one of the largest export markets for Indian medicines. Following the announcement, shares of several Indian pharma companies, including Cipla, Lupin, Sun Pharma, Dr Reddy’s Laboratories, Zydus Lifesciences, Alkem Laboratories, and Torrent Pharma, witnessed a decline of up to 2% in the stock market.

India supplies nearly 30% of its pharmaceutical exports to the US market. However, exports to the US, Canada, and Mexico declined by around 7.9% in 2025-26, with the downward trend continuing.

Experts have questioned whether the US can successfully increase domestic generic drug production within the proposed two-year timeline. They said establishing manufacturing facilities, obtaining regulatory approvals, and meeting quality requirements could take significantly longer.

The US healthcare system heavily depends on generic medicines, with nearly 90% of prescriptions in the country being generic drugs, while only around 10% are branded or patented medicines.

Industry experts warn that the new tariff structure could increase costs for pharmaceutical companies and potentially impact the availability and pricing of affordable medicines in the US market. Indian drug manufacturers are closely monitoring the policy developments and their possible impact on exports.