Trump’s 200% tariff plan may be a bitter pill for US consumers; Dr Reddy’s warns of costlier medicines

The US is putting generic medicines on the tariff map, with duties set to rise to as much as 200% in the coming years to boost local manufacturing. But will the cure soothe the pain for American consumers—or inflame it further? Dr Reddy’s Laboratories said that higher import duties will likely push up medicine prices. Furthermore, despite the policy push, moving manufacturing to the country is impractical. Speaking during the company’s earnings call on Wednesday, Dr Reddy’s CEO Erez Israeli said any increase in tariffs would inevitably translate into higher prices for medicines in the US. “If the tariff is increased, we will have to increase prices in the US,” Israeli told reporters.While US President Donald Trump’s announcement gives companies two years before tariffs begin to kick in, Israeli said Dr Reddy’s has no plans to make immediate changes.“Naturally, we will see how this will evolve,” Israeli said, adding “we are not going to do anything special because of the announcement”.He also ruled out shifting manufacturing operations to the US, saying such a move is not practical. According to him, tariffs would simply add to the overall cost burden.The company, however, is not shutting the door on other opportunities. Asked whether partnerships, technology transfer or contract manufacturing in the US could be explored, Israeli said Dr Reddy’s is “always open to anything that will be good for the business”.At the same time, he said the economics do not currently support such a move. Referring to the “magnitude and cost difference” between the US and markets such as Russia, Israeli said, “we are very far from such a step, but if required we will look at it”.

India and Trump’s phased tariff plan

The comments come after Trump unveiled the final stage of his pharmaceutical tariff strategy.In a post on Truth Social, the US President announced that imported generic medicines will continue to enter the country at a zero per cent tariff until August 1, 2028. From then, they will face a 100 per cent tariff for one year, followed by a 200 per cent tariff thereafter.According to Trump, the two-year window is intended to give drugmakers enough time to relocate generic drug manufacturing to facilities in the US. Companies that continue importing generic medicines after the transition period would face the higher tariff rates.The latest move effectively extends Trump’s tariff framework to generic medicines, bringing nearly every major pharmaceutical category under the proposed regime.Earlier, on September 25, 2025, Trump had proposed a 100 per cent tariff on imported branded and patented medicines, but that proposal was never implemented and was later replaced. On April 2, 2026, the administration imposed tariffs of up to 100 per cent on selected branded medicines and key pharmaceutical ingredients under the Section 232 national security framework, while generic medicines remained exempt.The announcement could have significant implications for India, which is the largest exporter of generic medicines to the US.According to a Global Trade Research Initiative (GTRI) report, the US imported pharmaceutical products worth $213 billion in 2025. Finished medicines sold in retail packs, a category that includes generic medicines, accounted for $94.1 billion of those imports.Ajay Srivastava, founder of GTRI, said India has the highest exposure to the new tariff plan among exporters of generic medicines to the US.