U.S. President Donald Trump announced 100% tariffs on generic drugs starting August 2028, rising to 200% a year later, after a two-year zero-tariff period beginning August 1. Erez Israeli, CEO of Dr. Reddy’s Laboratories, said these tariffs cannot be absorbed by companies and would lead to price increases matching the tariff amount. Indian companies supply nearly half of generic drugs to the United States, with Dr. Reddy’s generating 27% of its total sales from the U.S. market. Manufacturing generics in the U.S. is not economically viable and would take four to seven years according to the CEO. Global brokerage Nomura confirmed that Indian companies are unlikely to move manufacturing to the U.S. due to low economic viability.
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