Tariff talk versus reality: Over half of US drugs, two-thirds of generics sourced overseas

Pharma imports dominate the US market

US President Donald Trump has constantly threatened to impose pharma tariffs as high as 200 percent while also signaling to push the sector under Most Favored Nation (MFN) trade agreement. However, the irony is stark - while the US talks tough on trade barriers, most of its drug supply comes from overseas.

At the upcoming USFDA meeting on September 30, the central focus will be USA's dependence on foreign-made medicines. Today, more than half of the pharmaceuticals consumed in the US are produced abroad.

As of 2025, about 53 percent of brand drug products and 69 percent of generic drugs are manufactured outside the US. On the active pharmaceutical ingredient (API) side, the dependence is even deeper: just 9 percent of API manufacturers are based in America, compared to 22 percent in China and a dominant 44 percent in India.

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This dependency is decades in the making. Until the early 2000s, pharmaceutical production was mostly domestic. Globalisation gradually shifted the balance, making overseas plants the backbone of the US drug supply. Trump’s tariff threats, framed as protectionist and aimed at supply chain security, come at a time when Washington is urgently trying to restore local capacity.

On May 5, 2025, the administration issued Executive Order 14293, “Regulatory Relief to Promote Domestic Production of Critical Medicines,” directing the Food and Drug Administration to streamline rules, cut red tape, and accelerate approvals. In response, the FDA unveiled “PreCheck,” a two-step fast-track program to help set up high-priority pharmaceutical manufacturing facilities.

The first step, the Facility Readiness Phase, allows manufacturers to seek technical advice, pre-operational reviews, and maintain a facility-specific Drug Master File before going live. The second step, the Application Submission Phase, builds on this by expediting reviews and inspections.

With imports still dominating and new policies scrambling to close the gap, the US pharma industry faces a tough balancing act: steep tariffs and trade risks on one hand, and a rushed push for domestic revival on the other.

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