Washington—Speaking at an event at the National Republican Congressional Committee, US President Donald Trump has announced that the United States will soon impose “significant” tariffs on pharmaceutical imports. According to Trump, these tariffs will incentivize pharmaceutical companies to move their production operations to the US.

European pharmaceutical companies, fearing the impact of the tariffs, warned the European Commission in a meeting on Tuesday that Trump’s tariffs would accelerate the industry’s shift away from Europe and towards the US.

The European Pharmaceutical Trade Group (EFPIA), whose members include major European pharmaceutical companies such as Bayer, Novartis, and Novo Nordisk, urged European Union President Ursula von der Leyen to take “rapid and radical action” to mitigate the “risk of exodus” to the US.

EFPIA stated that the European Union needs to change its regulatory framework for the pharmaceutical industry to make it more conducive to innovation and strengthen Europe’s intellectual property protections.

These demands are not new. EFPIA has repeatedly warned that if the European Union does not amend the proposed overhaul of laws governing the pharmaceutical sector, Europe’s pharmaceutical industry will lose out to increasing competition from the US, China, and emerging markets.

According to EFPIA, “Now with the uncertainty created by the threat of tariffs, there is little incentive to invest in the EU and significant drivers to relocate to the US.”

The imposition of “significant” tariffs on pharmaceutical imports is particularly important for the Indian pharmaceutical industry, as the US is India’s largest export market for pharmaceuticals. According to the Pharmaceuticals Export Promotion Council of India, in FY 24, 31% of India’s $27.9 billion worth of pharmaceutical exports, or $8.7 billion, went to the US.

Reports suggest that India supplies over 45% of generic drugs and 15% of biosimilar drugs used in the US. Companies like Dr. Reddy’s, Aurobindo Pharma, Zydus Lifesciences, Sun Pharma, and Gland Pharma reportedly earn 30-50% of their total revenues from the US market. These proposed tariffs could negatively impact the export of Indian pharmaceutical companies.

In this context, there is a possibility of indirect impact on the Nepali pharmaceutical market as well, since changes in the international market could affect the availability and pricing of pharmaceuticals in Nepal.