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29 Sep 2025 : Weaponising health care

 Editorial 1: ​Weaponising health care

Context

Trump’s move is expected to significantly increase health care costs for Americans.

 

Introduction

Trump’s move to impose steep tariffs on imported patented medicines marks a turning point in U.S. health policy. By targeting branded drugs that form a key part of the medical supply chain, the decision is expected to significantly increase health care costs for Americans, strain insurance systems, and disrupt global pharmaceutical trade patterns already under geopolitical stress.

U.S. Tariff Announcement and Its Immediate Impact

  • Tariff Imposition: President Donald Trump announced 100% tariffs on imports of branded and patented medicines effective October 1.
  • Sector Affected: Prescription drugs form about 10% of household medical care spending in the U.S.
  • Exemptions: A 15% tariff cap will still apply to imports from the European Union and Japan, which supply nearly three-fourths of U.S. pharma imports.
  • High-Value Drugs: Many imports include patented medicines such as Wegovy and Ozempic (Danish-made weight-loss and anti-diabetes drugs).
  • Severe Impact: Patients needing specialised cancer treatments or rare disease drugs could face heavy cost increases.
  • Insurance Effect: Health insurance companies may pass on higher drug costs to policyholders.
  • Economic Estimate: An Ernst & Young study estimated that a 25% tariff could raise annual U.S. drug costs by $51 billion.
  • Most Exposed Countries: U.K., Switzerland, and Singapore, as they face the full 100% tariff burden, making their products less competitive.

India’s Position and Potential Risks

  • Current Relief: India’s generics industry has been spared from tariffs for now.
  • Generics’ Role: Generics account for 90% of prescriptions in the U.S. but only 13% of total spending.
  • Export Value: India exported over $10.5 billion worth of formulations to the U.S. in FY25.
  • Possible Threats:
    • Any tariff expansion to include generics or biosimilars would hit India’s pharma exports hard.
    • Uncertainty remains over whether Active Pharmaceutical Ingredients (APIs) will be included; India and China are leading global API suppliers.

Broader Global Implications

  • U.S. Pharma Industry: The U.S. continues to be a leading exporter of innovative medicines, raising questions about how these tariffs will affect its export competitiveness.
  • Industry Pushback: PhRMA (Pharmaceutical Research and Manufacturers of America) opposed the tariffs, arguing they would increase patient costs without fixing supply chain weaknesses.
  • Impact on Americans: Retail drug prices, especially for advanced therapies, are expected to rise significantly.
  • Global Reordering: This decision reflects how post–World War II global supply chains are being reshaped by political realities.
  • Strategic Need for India: India’s pharma sector must diversify export markets and build alternative trade alliances to reduce reliance on the U.S. market.

 

Conclusion

The new tariffs highlight how political choices can reshape global commerce and patient access to lifesaving drugs. As health care costs for Americans climb, exporters and policymakers worldwide must seek diversified markets and alternative supply routes. Trump’s move serves as both a warning and an opportunity for countries like India to fortify their pharma exports against sudden trade shocks.