COVER STORY
begun to signal unease. While publicly muted— no industry wants to be seen as taking sides in an election-year tariff fight— lobbyists in Washington are reportedly warning lawmakers of“ drug cost escalation” if Indian imports are targeted further.
The impact across the value chain
The tariff story for healthcare is not just about finished pills crossing borders. It is about active pharmaceutical ingredients( APIs), contract research organizations( CROs), biologics fill-finish operations, medical devices and the services that support clinical trials.
API manufacturers are already under pressure from raw material inflation and energy costs. For many, exports to the U. S. yield margins of barely 5 – 10 %. A 50 % tariff would obliterate profitability.
“ On a $ 10 generic pack, our net gain is maybe 50 cents. A tariff could wipe that out,” said the CFO of a mid-sized pharma exporter in Ahmedabad.“ The U. S. buyer will not pay more— they will switch suppliers or push us out.”
The risk is not just economic. Many life-saving generics, from antibiotics to oncology drugs, are sourced primarily from India. A supply disruption could trigger shortages in American hospitals.
India has steadily built a foothold in biosimilars and biologics manufacturing. Companies like Biocon have pioneered insulin analogs and monoclonal antibodies for global markets. Tariffs on these higher-value products would reduce competitiveness just as India was breaking into the premium biotech segment.
India’ s CRO industry, worth over $ 2 billion, thrives on cost efficiency and speed. But tariffs on laboratory reagents, instruments, or data services could drive international clients to reroute projects to Eastern Europe or Southeast Asia.“ It’ s not just the direct cost,” explained a Bengaluru-based CRO director.“ Clients hate uncertainty. Tariff volatility makes India look risky.”
While the U. S. has not yet extended tariffs to Indian medical devices, the fear persists. India is an emerging supplier of low-cost diagnostic kits, stents, and surgical equipment. Any tariff escalation would stall exports just as the sector is trying to scale globally.
The U. S. healthcare system depends on affordable generics to keep prescription costs down. Any significant reduction in supply— or higher costs passed onto payers— could increase out-of-pocket spending, insurance premiums and pressure on hospitals.“ Generic medicines imported from India have a very positive contribution to bringing down the cost of medicines,” noted Viranchi Shah of the Indian Drug Manufacturers’ Association.
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BioVoiceNews | September 2025