'Pharmaceutical tariffs coming in next month or two': Howard Lutnick signals imminent tariffs on imported medicines

“Pharmaceutical tariffs also coming in next month or two,” said U.S. Commerce Secretary Howard Lutnick during an interview with ABC News on Sunday.

"We can't be relying on China for fundamental things that we need: our medicines and our semiconductors need to be built in America," Howard Lutnick told ABC's "This Week."

"We can't be beholden and rely upon foreign countries for fundamental things that we need," he said. "So this is not like a permanent sort of exemption. He's just clarifying that these are not available to be negotiated away by countries. These are things that are national security that we need to be made in America."

This statement came just days after President Donald Trump declared a fresh trade offensive. Speaking at the National Republican Congressional Committee, Trump confirmed the U.S. will soon impose what he described as a “major” tariff on imported drugs.

For years, pharmaceuticals were kept outside the White House's broader tariff war, but that exemption now appears to be ending. This shift could bring significant consequences, especially for countries like India, which are tightly intertwined with the U.S. drug market.

India’s pharma sector in the firing line
India's pharmaceutical industry is closely linked to the United States. In FY24, the U.S. accounted for $8.7 billion of India’s total $27.9 billion pharma exports, according to the Pharmaceuticals Export Promotion Council of India.

More than 45% of the generic drugs used in the U.S. are made in India. Add to that 15% of biosimilars, and the exposure becomes clear. Industry giants such as Dr Reddy's, Aurobindo Pharma, Zydus Lifesciences, Sun Pharma and Gland Pharma earn up to half of their revenues from American consumers.

Now, all eyes are on the tariff decision. If enacted, it could put pressure on an already stretched system.

“It will impact both countries”
As reported by Reuters, analysts are warning that these tariffs could cause pain on both sides.

“In case the U.S. starts imposing tariffs on the pharma sector, it will impact both countries,” analysts at HDFC Securities told Mint.

The U.S. relies heavily on low-cost Indian generics. Imposing new duties could push up prices, worsen inflation, and trigger shortages of essential drugs—especially antibiotics and common treatments. Indian drugmakers, already operating on narrow margins in the generics space, may be unable to absorb the added costs. Many would likely pass them on to insurers and patients in America.

Trump wants drugs made in the US
Trump has repeatedly argued that major pharmaceutical firms should bring their production back home. His key targets include U.S. giants like Eli Lilly, Johnson & Johnson, and Pfizer.

At the April 2 tariffs announcement, Trump claimed, “The U.S. no longer produces enough antibiotics.” He said this dependency on India and China must end.

Ireland, in particular, came under fire from Trump for acting as a production base for brand-name drugs, thanks to its low tax rates. He also took aim at American pharma firms for registering intellectual property overseas to reduce tax burdens.

“These other countries are smart,” Trump said on Tuesday. “They say you can’t charge more than $88 otherwise you can’t sell your product, and the drug companies listen to them.”

Unlike Britain or Germany, the U.S. does not operate a centralised health system. Instead, pricing is managed by a patchwork of private insurers and government programmes like Medicare. Recent reforms under President Biden have introduced limited price negotiations, but the system remains largely market-driven.

Industry pushback and strategic stockpiling
Big Pharma isn’t taking the threat lightly.

According to Reuters, major drugmakers have lobbied Trump to phase in the new rules gradually, giving them time to shift operations. Eli Lilly and others have since announced fresh investments to expand domestic manufacturing capacity. Novo Nordisk is also exploring ways to make more medicines in America.

But building new facilities isn’t easy. Industry group PhRMA estimates that it can take 5 to 10 years and up to $2 billion to set up a plant that meets all regulatory requirements.

Some companies, anxious about delays, have already begun flying in bulk stock from Europe to build inventories before the tariffs land.

Timeline still unclear amid policy whiplash
Although Trump said the pharma tariff announcement would come “very shortly”, the exact timeline remains hazy.

The White House recently listed pharmaceuticals under Section 232 of the 1962 U.S. Trade Act. That triggers a Commerce Department investigation into whether drug imports pose a threat to national security. Such probes can take up to 270 days.

At the same time, Trump added to the confusion by announcing he would ease some new tariffs on other countries—even as he doubled down on China.

Risks for innovation and supply chains
Industry insiders say the fallout could be severe. Not just for generics, but for innovation.

Margins for high-end branded drugs could shrink under tariffs, leaving less cash for research and development. "The risk is not only about access, it’s about future breakthroughs," one executive warned.

And with generic makers unable to sustain production at higher costs, essential drugs could vanish from the shelves—particularly those used to treat infections and chronic diseases.

For India, the stakes are high. Pharma exports are a vital economic driver, and the U.S. remains its biggest market. For the U.S., the goal is domestic self-reliance—but not at the cost of accessibility or affordability.

As the world’s drug supply chains brace for impact, the coming weeks could decide whether patients or politics will shape the future of medicine.