Americans who depend on generic drugs—90% of all prescriptions—face steep price increases starting in 2028 under tariffs announced this week by President Trump, according to the CEO of one of the largest suppliers to the U.S. market.
Erez Israeli, who runs Dr. Reddy’s Laboratories, told CNBC Thursday that his company cannot absorb the planned levies and will pass costs directly to patients “in the magnitude of the tariff.” The Indian drugmaker is among suppliers that provide nearly half of all generic medications dispensed in American pharmacies.
100% Tariff Hits in Two Years
Trump’s policy gives drugmakers a two-year grace period with zero tariffs beginning August 1. Then on August 1, 2028, a 100% tariff takes effect, doubling to 200% a year later. The administration aims to force pharmaceutical manufacturing back to American soil.
But Israeli warned that timeline is unrealistic. Moving production facilities to the U.S. would take four to seven years, he said—far longer than the two-year window before tariffs hit.
Generic drugs operate on razor-thin profit margins. Israeli made clear his company has no room to absorb tariff costs without raising prices for American consumers.
What It Means for Your Pharmacy Bill
The policy puts pressure on the medications Americans rely on most. Generic drugs make up more than 90% of prescriptions filled in the United States, keeping costs manageable for millions of families and seniors on fixed incomes.
Indian pharmaceutical companies account for nearly half of generic drug supplies to the U.S., according to the Indian Pharmaceutical Alliance. Industry representatives say no generic manufacturer can absorb 100% tariffs without passing costs to patients.
For a senior paying $20 monthly for blood pressure medication, a 100% tariff could mean a $40 bill—then $60 when tariffs rise to 200%. Multiply that across multiple prescriptions and the impact on household budgets becomes severe.
The White House has not explained how it expects companies to relocate complex pharmaceutical operations in half the time industry experts say is needed, or what happens to drug prices during the transition.
Key Points
- Trump’s tariffs hit zero in August 2026, then jump to 100% in 2028 and 200% in 2029
- Indian suppliers provide half of U.S. generic drugs but say they can’t absorb costs
- CEO says moving production takes four to seven years—far longer than two-year grace period
https://www.cnbc.com/2026/07/24/us-to-see-higher-generic-drug-prices-on-tariffs-indian-pharma-ceo.html – July 24, 2026
