President Donald Trump’s imposition of a 100% tariff on branded and patented drug imports starting October 1st has sent shockwaves through the global pharmaceutical market, putting immediate pressure on key exporters, including India.While generic drugs—India’s specialty—are currently exempt, the threat of extending tariffs to complex generics and specialty medicines has rattled the entire sector.

India is the world’s pharmacy for generic drugs, with the U.S. accounting for over 35% of its pharma exports, valued at $10 billion annually. This heavy reliance leaves major Indian drug makers vulnerable.

Leading companies face immediate financial risk: Dr. Reddy’s generates 47% of its revenue from the U.S., and Sun Pharma 37%. Other billion-dollar U.S. revenue earners, including Lupin, Zydus Lifesciences, and Aurobindo Pharma, are also exposed. Following the announcement, shares of major Indian pharma companies dropped by up to 5%, with some hitting 52-week lows.

The tariffs’ impact extends beyond India. Globally, patented medicines like Wegovy and Ozempic, already expensive, face price hikes that could make them unaffordable for many Americans. An Ernst & Young study estimates that even a 25% tariff on patented medicines could raise annual drug costs by $51 billion, shifting the financial burden onto patients and insurers. Key pharma hubs like the U.K., Switzerland, and Singapore are also staring down steep tariff burdens, threatening global supply stability.

India’s generic sector, which supplies a crucial 90% of U.S. prescriptions, is safe for now but faces deep uncertainty regarding biosimilars and APIs (Active Pharmaceutical Ingredients). Since India and China dominate the global API supply, any future expansion of these tariffs could severely disrupt global medicine availability. For the Indian pharma sector, Trump’s action underscores the urgent need to diversify export markets and reduce its unsustainable over-reliance on the U.S