Trump delays generic drug tariffs until 2028

WASHINGTON – President Donald Trump has announced a phased tariff plan for imported generic drugs, giving manufacturers a two-year window before imposing steep duties that could reshape the global pharmaceutical supply chain.

Under the plan, generic drug imports will remain exempt from new tariffs through July 2028. A 100% tariff will take effect in August 2028, and a 200% tariff will take effect in August 2029. Trump said the escalating tariffs are intended to encourage manufacturers to establish pharmaceutical production in the United States. Patented and branded prescription drugs are not affected.

The announcement has significant implications for the U.S. health care system, where generic medicines account for more than 90% of prescriptions filled, according to the U.S. Food and Drug Administration. Much of that supply is produced in India, China, and Europe.

India is expected to be among the countries most affected. Indian pharmaceutical companies supply nearly half of all generic medicines consumed in the United States, making pharmaceuticals one of the country’s largest export categories to the U.S.

Industry observers cautioned that relocating generic drug manufacturing to the United States would be a lengthy and costly undertaking.

Deborah Elms, head of trade policy at the Hinrich Foundation, told CNBC that building domestic pharmaceutical manufacturing capacity remains difficult because many raw materials and components would still need to be imported.

“I am not sure that even a potential 200% tariff will change the fundamental math,” Elms said.

Nathan Gray, senior research fellow at the Institute for International Trade at Adelaide University, warned that shifting production to the U.S. could undermine the affordability that has made generic medicines the cornerstone of prescription drug access.

“This decision will lead to reduced access to generic medicines in the U.S. because they won’t be able to make them as affordable,” Gray said. “It’ll push them into higher pricing.”

Sandoz, one of the world’s largest generic drug manufacturers, said it was still evaluating the potential impact of the tariffs.

“We share the goal of improving affordability and access to medicines in the United States,” the company said in a statement.

The tariff proposal aligns with other administration efforts to reduce prescription drug costs. In May, Trump expanded the TrumpRx.gov prescription discount platform to include more than 600 generic medicines through partnerships with Amazon Pharmacy, GoodRx, and Cost Plus Drugs. The administration has also reached pricing agreements with several major branded drug manufacturers under its most-favored-nation pricing initiative, granting those companies temporary tariff exemptions.