Trump Announces Phased Tariff Plan on Generic Drug Imports: 0% Until 2028, Then 100% and 200%

President Donald Trump announced a phased tariff plan on imported generic drugs, keeping rates at 0% until August 2028, when a 100% tariff will take effect, rising to 200% in 2029. The policy, aimed at forcing manufacturers to reshore production to the U.S., faces skepticism from health experts. Critics warn the two-year timeline is unrealistic and could trigger severe drug shortages and price hikes, given that the U.S. relies on India and China for 90% of its generic prescriptions.

Trump generic drug tariffs

• ▪The tariff policy on patented, branded, or innovative drugs will remain unchanged under the new generic drug tariff plan
• ▪The phased tariff schedule is designed to pressure generic pharmaceutical manufacturers to reshore their production facilities to the United States
• ▪The Trump administration intends to use Section 232 of the Trade Expansion Act of 1962 to impose the generic drug tariffs
• ▪President Donald Trump announced that imported generic drugs will face a 0% tariff starting August 1, 2026, for two years, rising to 100% in August 2028 and 200% in August 2029

Overseas pharmaceutical manufacturing dependence

• ▪The United States has 1,400 drug finishing sites but only 230 factories that manufacture active pharmaceutical ingredients, compared to 524 in China and 564 in India
• ▪Pharmaceutical exports from India to the United States totaled $10.5 billion during the 2024-2025 fiscal year
• ▪India supplies approximately 50% of the generic drug prescriptions filled in the United States
• ▪Generic drugs account for approximately 90% of all prescriptions filled in the United States

Predicted drug shortages

• ▪Health policy experts warn that the proposed tariffs could cause generic drug manufacturers to exit the United States market, leading to severe drug shortages
• ▪Industry experts warn that the two-year timeline is insufficient for domestic manufacturers to build the specialized infrastructure required to meet United States generic drug demand

Expert opposition to policy

• ▪Sandoz CEO Richard Saynor stated that policymakers and the pharmaceutical industry must work together to create a sustainable framework for long-term investment in generic medicines
• ▪Association for Accessible Medicines CEO John Murphy III stated that generic manufacturers cannot easily absorb new costs and that current reimbursement structures inhibit domestic sector growth
• ▪Health policy experts and industry groups argue that generic drug manufacturers operate on thin margins and will likely pass tariff costs directly to consumers

Specific affected medications

• ▪Two India-based companies, Glenmark Pharmaceuticals Ltd. and Lupin Ltd., manufactured approximately 65% of all birth control pill prescriptions in the United States in 2024
• ▪China supplies the United States with approximately 95% of imported ibuprofen, 91% of hydrocortisone, 70% of acetaminophen, and 45% of penicillin