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| Trump: Tariffs on Indian drugs will be a bitter pill for Americans | Trump: Tariffs on Indian drugs will be a bitter pill for Americans |
| (about 3 hours later) | |
| Millions of Americans could see the cost of medicines shoot up if Trump imposes tariffs on Indian drugs | Millions of Americans could see the cost of medicines shoot up if Trump imposes tariffs on Indian drugs |
| With Donald Trump's tit-for-tat tariffs on India looming next month, millions of Americans may have to brace for steeper medical bills. | With Donald Trump's tit-for-tat tariffs on India looming next month, millions of Americans may have to brace for steeper medical bills. |
| Last week, Indian Commerce Minister Piyush Goyal made an unscheduled trip to the US for discussions with officials, hoping to strike a trade deal. | Last week, Indian Commerce Minister Piyush Goyal made an unscheduled trip to the US for discussions with officials, hoping to strike a trade deal. |
| It followed Trump's announcement that he would impose tariffs - which are government taxes on foreign imports - on India by 2 April, in retaliation to India's tariffs on American goods. | It followed Trump's announcement that he would impose tariffs - which are government taxes on foreign imports - on India by 2 April, in retaliation to India's tariffs on American goods. |
| Goyal wants to stave off tax increases on India's critical export industries like medicinal drugs. | Goyal wants to stave off tax increases on India's critical export industries like medicinal drugs. |
| Nearly half of all generic medicines taken in the US come from India alone. Generic drugs - which are cheaper versions of brand-name medications - imported from countries like India make up nine out of 10 prescriptions in the US. | |
| This saves Washington billions in healthcare costs. In 2022 alone, the savings from Indian generics amounted to a staggering $219bn (£169bn), according to a study by consulting firm IQVIA. | This saves Washington billions in healthcare costs. In 2022 alone, the savings from Indian generics amounted to a staggering $219bn (£169bn), according to a study by consulting firm IQVIA. |
| Without a trade deal, Trump's tariffs could make some Indian generics unviable, forcing companies to exit part of the market and exacerbating existing drug shortages, experts say. | Without a trade deal, Trump's tariffs could make some Indian generics unviable, forcing companies to exit part of the market and exacerbating existing drug shortages, experts say. |
| Tariffs could "worsen the demand-supply imbalances" and the uninsured and poor will be left counting the costs, says Dr Melissa Barber, a drug costing expert from Yale University. | Tariffs could "worsen the demand-supply imbalances" and the uninsured and poor will be left counting the costs, says Dr Melissa Barber, a drug costing expert from Yale University. |
| The effects could be felt across people suffering from a range of health conditions. | The effects could be felt across people suffering from a range of health conditions. |
| Over 60% of prescriptions for hypertension and mental health ailments in the US were filled with Indian-made drugs, according to the IQVIA study funded by the Indian Pharmaceutical Alliance (IPA). | Over 60% of prescriptions for hypertension and mental health ailments in the US were filled with Indian-made drugs, according to the IQVIA study funded by the Indian Pharmaceutical Alliance (IPA). |
| Sertraline, the most prescribed antidepressant in the US, is a prominent example of how dependent Americans are on Indian supplies for essential drugs. | Sertraline, the most prescribed antidepressant in the US, is a prominent example of how dependent Americans are on Indian supplies for essential drugs. |
| Many of them cost half as much as for those from non-Indian companies. | Many of them cost half as much as for those from non-Indian companies. |
| "We are worried about this," says Peter Maybarduk, a lawyer at Public Citizens, a consumer advocacy group fighting for access to medicines. One in four American patients already fail to take medicines due to their costs, he adds. | "We are worried about this," says Peter Maybarduk, a lawyer at Public Citizens, a consumer advocacy group fighting for access to medicines. One in four American patients already fail to take medicines due to their costs, he adds. |
| Trump is already reportedly facing pressure from US hospitals and generic drugmakers because of his tariffs on Chinese imports. | Trump is already reportedly facing pressure from US hospitals and generic drugmakers because of his tariffs on Chinese imports. |
| The raw materials for 87% of the drugs sold in the US are located outside the country and primarily concentrated in China which fulfils around 40% of global supply. | The raw materials for 87% of the drugs sold in the US are located outside the country and primarily concentrated in China which fulfils around 40% of global supply. |
| With tariffs on Chinese imports rising 20% since Trump took office, the cost of raw materials for drugs have already gone up. | With tariffs on Chinese imports rising 20% since Trump took office, the cost of raw materials for drugs have already gone up. |
| About 60% of prescriptions for hypertension and mental health ailments in the US are filled with Indian-made drugs | About 60% of prescriptions for hypertension and mental health ailments in the US are filled with Indian-made drugs |
| Trump wants companies to shift manufacturing to the US to avoid his tariffs. | Trump wants companies to shift manufacturing to the US to avoid his tariffs. |
| Big pharma giants like Pfizer and Eli Lily, that sell brand name and patented drugs, have said they are committing to move some manufacturing there. | Big pharma giants like Pfizer and Eli Lily, that sell brand name and patented drugs, have said they are committing to move some manufacturing there. |
| But the economics for low-value drugs do not add up. | But the economics for low-value drugs do not add up. |
| Dilip Shanghvi, chairman of India's largest drugmaker Sun Pharma, told an industry gathering last week that his company sells pills for between $1 and $5 per bottle in the US and tariffs "do not justify relocating our manufacturing to the US". | Dilip Shanghvi, chairman of India's largest drugmaker Sun Pharma, told an industry gathering last week that his company sells pills for between $1 and $5 per bottle in the US and tariffs "do not justify relocating our manufacturing to the US". |
| "Manufacturing in India is at least three to four times cheaper than in the US," says Sudarshan Jain of the IPA. | "Manufacturing in India is at least three to four times cheaper than in the US," says Sudarshan Jain of the IPA. |
| Any quick relocation will be next to impossible. Building a new manufacturing facility can cost up to $2bn and take five to 10 years before it is operational, according to lobby group PhRMA. | Any quick relocation will be next to impossible. Building a new manufacturing facility can cost up to $2bn and take five to 10 years before it is operational, according to lobby group PhRMA. |
| With Donald Trump's tariffs looming, Indian Commerce Minister Piyush Goyal made an unscheduled trip to the US last week | With Donald Trump's tariffs looming, Indian Commerce Minister Piyush Goyal made an unscheduled trip to the US last week |
| For local pharma players in India, the tariff blow could be brutal too. | For local pharma players in India, the tariff blow could be brutal too. |
| The pharmaceutical sector is India's largest industrial export according to GTRI, a trade research agency. | The pharmaceutical sector is India's largest industrial export according to GTRI, a trade research agency. |
| India exports some $12.7bn worth of drugs to the US annually, paying virtually no tax. US drugs coming into India, however, pay 10.91% in duties. | India exports some $12.7bn worth of drugs to the US annually, paying virtually no tax. US drugs coming into India, however, pay 10.91% in duties. |
| This leaves a "trade differential" of 10.9%. Any reciprocal tariffs by the US would increase the costs for both generic medicines and specialty drugs, according to GTRI. | This leaves a "trade differential" of 10.9%. Any reciprocal tariffs by the US would increase the costs for both generic medicines and specialty drugs, according to GTRI. |
| It flags up pharmaceuticals as one of the sectors that is most vulnerable to price increases in the US market. | It flags up pharmaceuticals as one of the sectors that is most vulnerable to price increases in the US market. |
| Indian firms which largely sell generic drugs already work on thin margins and won't be able to afford a steep tax outgo. | Indian firms which largely sell generic drugs already work on thin margins and won't be able to afford a steep tax outgo. |
| They sell at much lower prices compared to competing peers, and have steadily gained dominance across cardiovascular, mental health, dermatology and women's health drugs in the world's largest pharma market. | They sell at much lower prices compared to competing peers, and have steadily gained dominance across cardiovascular, mental health, dermatology and women's health drugs in the world's largest pharma market. |
| "We can offset single-digit tariff hikes with cost cuts, but anything higher will have to be passed down to consumers," the finance head of a top Indian drugmaker who didn't want to be identified, told the BBC. | "We can offset single-digit tariff hikes with cost cuts, but anything higher will have to be passed down to consumers," the finance head of a top Indian drugmaker who didn't want to be identified, told the BBC. |
| North America is their biggest revenue source, contributing a third of the earnings and profitability of most companies. | North America is their biggest revenue source, contributing a third of the earnings and profitability of most companies. |
| "It is the fastest growing market and most crucial. Even if we increase exposure to other markets, it will not adjust for any loss in the US market," the finance head said. | "It is the fastest growing market and most crucial. Even if we increase exposure to other markets, it will not adjust for any loss in the US market," the finance head said. |
| Umang Vohra, CEO of India's third-largest drug firm Cipla, said at a public gathering recently that tariffs should not ultimately dictate what businesses do, "because there is a risk that four years later, those tariffs may go away". | Umang Vohra, CEO of India's third-largest drug firm Cipla, said at a public gathering recently that tariffs should not ultimately dictate what businesses do, "because there is a risk that four years later, those tariffs may go away". |
| But four years is a long time, and could make or break the fortunes of several companies. | But four years is a long time, and could make or break the fortunes of several companies. |
| India has agreed to cut tariffs "way down", Donald Trump said recently | India has agreed to cut tariffs "way down", Donald Trump said recently |
| To avoid any of this, "India should just drop its tariffs on pharma goods", Ajay Bagga, a veteran market expert told the BBC. "US drug exports into India are barely half a billion dollars, so the impact will be negligible." | To avoid any of this, "India should just drop its tariffs on pharma goods", Ajay Bagga, a veteran market expert told the BBC. "US drug exports into India are barely half a billion dollars, so the impact will be negligible." |
| The IPA, which consists of India's largest drug makers, has also recommended zero duty on US drug exports so that India isn't negatively impacted by reciprocal levies. | The IPA, which consists of India's largest drug makers, has also recommended zero duty on US drug exports so that India isn't negatively impacted by reciprocal levies. |
| Indian Prime Minister Narendra Modi's government recently added 36 life-saving drugs to the list of medicines fully exempted from a basic customs duty in the budget, and President Trump dropped a hint last week that India could be yielding to his pressure. | Indian Prime Minister Narendra Modi's government recently added 36 life-saving drugs to the list of medicines fully exempted from a basic customs duty in the budget, and President Trump dropped a hint last week that India could be yielding to his pressure. |
| India has agreed to cut tariffs "way down", he said, because "somebody is finally exposing them for what they have done". | India has agreed to cut tariffs "way down", he said, because "somebody is finally exposing them for what they have done". |
| Delhi has not responded yet, but pharma players in both countries are nervously waiting to see the specifics of a trade deal that could have a bearing on lives and livelihoods. | Delhi has not responded yet, but pharma players in both countries are nervously waiting to see the specifics of a trade deal that could have a bearing on lives and livelihoods. |
| "In the short term, there may be some pain through new tariffs, but I think they'll make significant progress by the fall of this year for a first tranche [trade] agreement," Mark Linscott, former assistant US trade representative, told the BBC, adding that neither country could afford a breakdown in pharma supply chains. | "In the short term, there may be some pain through new tariffs, but I think they'll make significant progress by the fall of this year for a first tranche [trade] agreement," Mark Linscott, former assistant US trade representative, told the BBC, adding that neither country could afford a breakdown in pharma supply chains. |
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