Trump threatens tariffs of up to 200 percent on imported generics

Generics are follow-on versions of original drugs and are generally offered at significantly lower prices than the brand-name products. In the US, drug prices are particularly high by international comparison – a point on which Trump explicitly bases his policy.

Trump justified the move, among other things, with the protection of the American population. "Diese Maßnahme dient dem Schutz der amerikanischen Bevölkerung," he stated in the same post. "Das wird gemacht, um die Produktion von Generika nach Amerika zurückzubringen," he reaffirmed. Companies should use the transition period to build production facilities in the US. Those who decided against building production facilities in the US would be punished, Trump threatened, without providing details.

Justification: protection, research and competition

At the same time, the US president accused pharmaceutical companies of distorting competition at the expense of US firms through cheaper production abroad. He also pointed to the particularly high research costs of the US pharmaceutical industry as an argument for his tariff policy. The goal is to push down the comparatively high drug prices in the US.

Until now, generics had been exempt from the US tariffs on pharmaceuticals announced in April of this year, which can amount to up to 100 percent. In the spring, Trump had already announced a 100 percent tariff on patent-protected brand-name drugs with a staggered start from the end of July. These already applicable measures in the area of other pharmaceuticals remain in force unchanged.

The latest move is likely to primarily affect manufacturers that produce generics outside the US. India is considered the most important exporter of generics and would be particularly affected by Trump's latest tariff offensive. European production sites, such as those in Austria and Slovenia, also play a significant role in generics manufacturing.

Previous tariffs and exemptions

Trump also reaffirmed in his post that no tariffs would continue to be levied on generics until the summer of 2028. At the same time, he indicated that manufacturers of patent-protected original preparations should not be affected by the new tariffs. Along with the agreements on brand-name drugs, Washington had already provided exemptions, for example, for companies that also produce in the US, and in certain cases under trade agreements.

How exactly Trump intends to implement the new tariffs, however, he left open. He cited no legal basis for the threatened measures. It also initially remained unclear in what form his trade secretary, Howard Lutnick – whom he tasked with a one-year deadline to review and, if necessary, recommend new measures – is to concretely shape the policy.

In the US, the government has reached agreements with most major pharmaceutical groups that exempt them from tariffs in exchange for price reductions – particularly for the state Medicaid program. Under these agreements, the companies must also offer some of their products directly via the TrumpRx platform. These agreements cover companies including Roche and Novartis.

Impact on manufacturers and patients

Roche and Novartis are not affected by the latest tariff threat, as they focus on original preparations. The same applies to a reduced tariff rate of 15 percent on Swiss pharmaceutical exports established by White House decree in April 2026. Switzerland, however, expressed concern: The Swiss Federal Department of Economic Affairs, Education and Research (WBF) described additional US tariffs on pharmaceutical products, in response to an inquiry from Keystone-SDA, as an additional burden for the exporting Swiss pharmaceutical industry.

The US is the most important sales market for Swiss pharmaceutical companies. The Basel-based generics manufacturer Sandoz, which was spun off from Novartis in 2023, generated 70 percent of its revenue last year from classic generics and 30 percent from biosimilars. Biosimilars are considered an important growth driver for the company.

Sandoz CEO Richard Saynor has repeatedly warned that tariffs on generics would raise drug prices in the US and worsen patient access. In an interview with the NZZ, Saynor also stated that rebuilding capacity in the US under current conditions would not be economically viable. Sandoz primarily produces in Austria and Slovenia for cost reasons, has reduced its own production capacity in the US, and outsourced parts of its production to Canada under a long-term supply agreement with a partner.

Swiss pharmaceutical industry and Sandoz

Other Swiss contract manufacturers such as Siegfried, Bachem and Lonza, by contrast, already have significant production capacity in the US. Lonza operates one of the world's largest biotech factories at its California site. These locations could gain in importance if generics production is relocated to the US – provided the policy is actually implemented as announced.

For the US itself, the measure carries risks: since India generates a significant share of its exports to the US with pharmaceuticals, a tariff dispute could severely disrupt supply chains. The US government had previously stated that certain products were exempt from earlier pharmaceutical tariffs because they were not available in sufficient quantities in the United States or affected particularly sensitive supply chains – an indication of possible supply bottlenecks should the new tariffs come into force.

The US government hopes that the tariffs will encourage pharmaceutical companies to expand their production in the United States. In the previous week, Trump had also announced new tariffs of 25 percent on products from Brazil, which took effect on Wednesday – another building block in his trade-policy posture of threats toward various trading partners.

Risks for supply chains and prices

If the generics tariffs come into force as announced in 2028, they could significantly increase prices for inexpensive follow-on preparations in the US. Observers view the announcement as part of a broad strategy by the Trump administration to reduce trade deficits and pressure industries with location-based leverage to return to the US – with an open outcome for patients, manufacturers and global supply chains.