India and China make most of the drugs for the US market. That should be a good thing.

President Trump has promised high tariffs on the imports of pharmaceuticals into the United States, to compel drugmakers to reshore the manufacturing of drugs to the US.

Drug companies in Europe, Japan, and Singapore are particularly vulnerable. They earn their biggest profits in the American market, and charge far higher prices to US patients.

Investors are selling shares of the European drug companies, who face a tough choice between falling US sales because of even higher prices, or investing huge capital to set up new manufacturing lines in the US.

But another approach is apparent by looking closely at the supply chains for the pharmaceutical industry. Most of the key components for the drugs themselves come from India and China, who already produce at low cost. For many drugs, Western pharma companies simply package and brand the medicines produced by Indian and Chinese firms.

Instead of prioritizing the development of a yet another high-cost industry in the United States, policymakers should instead seek to slash drug prices paid by patients and hospitals. Buying directly from drugmakers in India and China would do the same for branded drugs as in off-label and generics.

Closing scene, Huangjuewan Interchange, Chongqing

Resources and links:

API manufacturing landscape excluding IV fluids, 2024 volume in extended units

https://qualitymatters.usp.org/over-half-active-pharmaceutical-ingredients-api-prescription-medicines-us-come-india-and-european

India and the EU dominate API manufacturing for the most-used ATC-3 therapeutic classes in the U.S. market

https://qualitymatters.usp.org/india-and-eu-dominate-api-manufacturing-most-used-atc-3-therapeutic-classes-us-market ..

Geographic concentration of pharmaceutical manufacturing: USP Medicine Supply Map analysis

https://qualitymatters.usp.org/geographic-concentration-pharmaceutical-manufacturing

U.S. Pharmaceutical Trade Balance and Key Suppliers

https://qyobo.com/us-tariffs-plans/

REALITY CHECK: Indian Pharma is a MADE IN CHINA story

https://biznewsbyjay.substack.com/p/reality-check-indian-pharma-is-a

Study Finds Over 90% of all Generic Drugs Dependent on Imports

https://prosperousamerica.org/study-finds-over-90-of-all-generic-drugs-dependent-on-imports/

Skyrocketing Pharmaceutical Imports to the U.S. Endanger National Security

https://prosperousamerica.org/skyrocketing-pharmaceutical-imports-to-the-u-s-endanger-national-security/

How pharma became Switzerland’s Achilles heel in US trade talks

https://www.swissinfo.ch/eng/drug-pricing/how-pharma-became-switzerlands-achilles-heel-in-us-trade-talks/89792388

Shares in European drug companies hit four-month low as Trump tariffs loom

https://www.theguardian.com/business/2025/aug/06/stocks-shares-european-drug-companies-three-month-low-trump-tariffs

How Big Pharma Profits Off U.S. Healthcare

https://www.statista.com/chart/25920/sales-revenue-of-best-selling-prescription-drugs-by-illness/

AP, Trump to put additional 25% import taxes on India, bringing combined tariffs to 50%

https://apnews.com/article/trump-india-russia-oil-tariffs-2db9dc22d7b56624bdceb2e15c134d60

New York Times, India Will Buy Russian Oil Despite Trump’s Threats, Officials Say

https://www.nytimes.com/2025/08/02/world/asia/india-russia-oil-trump-threats.html

Mirrored - Inside China Business