Donald Trump’s threat to levy 25 percent tariff on several import categories from India, including pharmaceuticals, has set off several alarms. While experts say this reactionary measure will significantly hit the US healthcare system itself, focus must also be trained on drugs manufactured in India—for exports and the domestic market.
Just as the industry is trying to understand the likely effect of such a tariff, Mumbai-based Aveo Pharmaceuticals has come under the scanner after a BBC investigation claimed the company was exporting opioids to west African nations that it was not licensed to sell there. The report triggered public health concerns in Nigeria, Ghana and Cote D’Ivoire. Aveo allegedly exported pills containing a strong opioid called tapentadol mixed with a muscle relaxant, carisoprodol, after the Nigerian government had in 2018 banned imports of pills containing a weaker opioid called tramadol, on which India has tightened controls too. On February 21, India’s Drugs Standard Control Organisation withdrew export clearance certificates for all unapproved combinations of tapentadol and carisoprodol.
This is not an isolated case. Over the years, there have been several cases of drugs made in India being rejected abroad after the US Food and Drug Administration raised red flags over contamination, inadequate manufacturing practices and data integrity violations, resulting in product recalls. Even the World Health Organization has linked deaths of children in Cameroon, Gambia and Uzbekistan to substandard drugs exported from India. Such cases are a serious blot on India’s $28-billion pharma exports that comprise generic and bulk drugs, vaccines and biosimilars. Exports account for more than half the country’s $50-billion pharma industry that ranks third in the world on volumes. About half the generic drugs prescribed in the US are supplied by Indian companies. So, manufacturing malpractice here can wreak a wide toll.
Cheaper generic drugs imported from India and China have helped the US healthcare system save a whopping $408 billion in 2022, according to one estimate. Higher tariffs on imports from India will be extremely consequential for US citizens, not just Indian companies. India, for itself, needs to strengthen its drug quality control mechanism with more audits and strict action against defaulters. It’s not just about saving a valuable export market—it’s about saving lives at home and abroad.