By Rishika Sadam and Kashish Tandon
MUMBAI/BENGALURU (Reuters) – Tariffs should not influence decisions at Indian drug companies, Cipla’s top executive said on Friday, as the industry braces for U.S. President Donald Trump’s plans to tax pharmaceutical imports.
India, often dubbed the “pharmacy of the world”, is among the top exporters to the U.S., especially for cheaper versions of popular drugs.
“I’m not sure tariffs should dictate what we should be doing as players, because there is a risk that four years later, those tariffs may go away,” Cipla Global CEO Umang Vohra said at the Global Pharmaceutical Quality Summit in Mumbai.
“So by the time you build a plant, tariffs have gone away. Now you have a plant sitting there, right? So I just think we should take a more holistic view.”
Trump has said he could impose duties of 25% or more on pharmaceutical imports and an announcement could be made by next month. He also asked companies to shift manufacturing to the U.S. to avoid tariffs.
Most drugmakers said they were awaiting clarity on what kind of tariffs would be imposed, if any.
“I don’t know how much difference it (tariffs) will make to us… and will not justify relocating our manufacturing,” said Sun Pharma MD Dilip Shanghvi.
“Ultimately, it (tariff impact) will be passed on to consumers,” Shanghvi said.
India imposes an about 10% tax on pharma imports from the U.S. while paying almost nothing on exports of its pharmaceutical products into the U.S., according to industry experts.
India makes cheaper generic versions of complex innovative drugs in its massive factory clusters and exports them to over 200 countries, and the U.S. is its biggest market, government data shows.
According to research firm IQVIA, nearly half of all prescriptions for generic medicines in the United States in 2022 were supplied by Indian drugmakers. Overall, generic drugs saved the U.S. health system about $408 billion.
Earlier this week, Dr Reddy’s MD GV Prasad told Reuters Indian drugmakers are likely to remain competitive in the generics market even if Trump levies a duty on pharmaceutical imports.
He had also said shifting manufacturing to the U.S. was not practical as they do not have enough capacity and costs would rise.
(Reporting by Rishika Sadam in Mumbai; Writing by Kashish Tandon; Editing by Devika Syamnath)
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