Pharma sector likely to feel the heat of US tariff

Enhanced tariffs on pharma imports in the US can severely impact Indian drug manufacturers as it would lead to higher production costs, making shipments less competitive against products from other countries. Smaller drug firms operating on thin margins can face severe pressure potentially forcing consolidation or closure. As per industry sources, overall, medicines from Indian companies provided $219 billion in savings to the US healthcare system in 2022 and a total of $1.3 trillion between 2013 and 2022. Generics from Indian companies are expected to generate an additional $1.3 trillion in savings over the next five years. However, in a situation where substantial tariffs are imposed by the US on Indian pharmaceutical products, that might encourage Indian pharma companies to diversify their export markets, possibly shifting focus to Europe, Latin America or Africa, as per a report.