Can tariffs bring generic drug manufacturing back to the US?

India’s pharmaceutical industry has become deeply embedded in the U.S. drug supply chain, creating a significant challenge for President Trump’s effort to bring generic drug manufacturing back to the U.S., The New York Times reports. 

At Dr. Reddy’s Laboratories’ F.T.O. U-3 factory in Hyderabad, India, about 1,900 workers produce more than 100 generic medicines, with roughly 75% of the nearly 1 billion oral doses made there each month destined for U.S. patients. Generics account for about 90% of prescriptions in the U.S., and 40% are made in India. 

Trump has proposed tariffs of 100% on generic drugs beginning in 2028 and 200% the following year, although a new 100% tariff on certain pharmaceutical imports implemented Tuesday exempted generic drugs and many other products. Indian pharmaceutical executives say even a 200% tariff might not eliminate the country’s cost advantage, with Sudarshan Jain of the Indian Pharmaceutical Alliance estimating that most tablets and liquids made in India would cost at least four times as much to produce in the U.S. 

India also benefits from decades of generic drug expertise, lower labor costs and faster factory construction. Doctors and supply chain experts warn that tariffs on imported generics could raise costs, cause rationing and contribute to shortages of critical medicines. 

Meanwhile, pharmaceutical supply chains remain highly interconnected, with Indian and U.S. facilities sometimes collaborating on the same medicines. 

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