Tariffs on generics may raise U.S. drug prices, Dr Reddy’s CEO warns
Dr. Reddy’s CEO Erez Israeli says Trump’s plan to tariff generic drugs would lift prices in the United States because the low-margin business cannot absorb added costs; moving generic manufacturing to the U.S. would likely take four to seven years. Despite onshoring aims, Indian manufacturers still dominate U.S. generic supply, and even with tariffs the cost gap makes relocation economically unviable for many firms. Dr. Reddy’s currently derives about 27% of its sales from the U.S. (down from 50%), with other Indian peers similarly benefiting from lower Indian production costs. Nomura also notes the tariffs could boost prices but won’t likely spur broad U.S. manufacturing migration.