Tariffs on Indian generics will hike US healthcare costs: USISPF

USISPF President Mukesh Aghi said proposed tariffs on Indian generic medicines will inflate US healthcare costs. He noted India supplies 40% of US generics, many used in govt programs, and tariffs would thus increase costs for the US govt itself.

US-India Strategic Partnership Forum (USISPF) President and CEO Mukesh Aghi on Friday said that higher tariffs proposed on Indian generic medicines will ultimately end up inflating healthcare costs for the United States government itself.

Speaking to ANI, Aghi highlighted that India supplies nearly 40 per cent of all generic drugs consumed in the United States, many of which are directly procured through government-funded healthcare programs like Medicare and Medicaid to significantly cut public healthcare expenditure. Commenting on US President Donald Trump's announcement of future tariff hikes on generic pharmaceutical imports, Aghi noted that it is too early to react since the steep increases are slated to take effect only in 2028 and 2029.

"India supplies roughly 40 per cent of the generic drugs consumed in the US, and most of them are funded by the government. So when you put in a 100 per cent tariff or 200 per cent tariff, basically the cost will go up for the government itself," Aghi told ANI. "I think it's important to understand that these early tariffs, which have been announced for '28 and '29--I think it's too early to respond to it. I think we should just keep our heads down, stay focused on trying to drive the export, helping the US Medicare and Medicaid system be much more efficient," he added, emphasising that Indian generics bring a "tremendous amount of savings" to the US treasury.

Trump's Tariff Policy on Generic Drugs

His remarks come as US President Donald J Trump on Wednesday announced that all generic drugs imported into the United States will continue to attract zero per cent tariffs for two years from August 1, 2026, after which tariffs will rise by up to 200 per cent.

Taking to Truth Social, Trump said the policy is aimed at bringing generic pharmaceutical production back to the United States, with penalties for companies that choose not to establish manufacturing plants and equipment within the specified timeframe.

"Effective August 1st, 2026, all Generic Drugs being brought into the United States will continue to have a TARIFF of ZERO PERCENT for two years, after which the TARIFF will be raised to 100% for one year, and 200% thereafter," he noted. He further stated that the objective is to protect the American people, while the existing policy on patented, branded and innovative drugs will remain unchanged.

"The objective of this Policy is to protect the people of the United States. The Policy on Patented, Branded, or Innovative Drugs, which has been so successful, will remain as is," he noted.

Tariff Implementation Timeline

Under the announced policy, imported generic drugs will remain subject to a 0% tariff from August 1, 2026 - July 31, 2028. Tariffs will increase to 100% for one year during August 1, 2028. From August 1, 2029 onward, tariffs will rise to 200% for companies that do not establish domestic manufacturing facilities and equipment within the specified timeframe. (ANI)

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