Trump announced a phased tariff plan on generic drug imports Tuesday. Generic drugs get a two-year zero-tariff grace period starting August 1, 2026. A 100% tariff hits in August 2028. That escalates to 200% in August 2029. The administration frames this as leverage to force pharmaceutical companies to build U.S. manufacturing plants. Companies that don’t build domestic production during the grace period face the penalty tariffs. Generic drugs were previously exempt from the administration’s earlier tariffs of up to 100% on branded and patented pharmaceuticals. This marks a reversal of that exemption.
Health policy experts and industry groups raised immediate concerns. Generic drugs account for roughly 90% of U.S. filled prescriptions, with about 70% sourced overseas. Critics say two years isn’t enough time to rebuild drug and API supply chains without triggering price hikes or shortages. India faces the largest exposure, supplying approximately 40% to 50% of U.S. generic prescriptions.
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