US Tariffs on Medicines Could Raise Costs, Disrupt Supply

U.S. proposals to impose tariffs on imported medicines have put the global drug supply and insurance markets on edge, even as a ratings agency says India’s pharmaceutical industry is well placed to absorb the shock. Officials and analysts say the moves under consideration by the Trump administration and recent trade deals could lift costs for U.S. patients and insurers, while India’s drugmakers are diversifying to limit damage to their finances and market share.

India Ratings and Research, known as IndRa, said in a recent analysis that most Indian pharma companies have the financial strength and business diversity to withstand prospective tariffs. The U.S. market accounts for roughly 35 percent of revenue for leading Indian firms, about $10.7 billion, the agency noted, and that exposure has been falling amid price erosion and margin pressure. Vivek Jain, director of corporates at IndRa, said most Indian players earn thin operating profitability in the U.S. generics market but possess a healthy balance sheet and sufficient headroom under debt covenants. He added that any tariffs would likely be passed on to U.S. consumers, limiting direct effects on Indian firms and producing at...