“Tariffs or Taxes: Biocon MD Weighs In on Reviving U.S. Manufacturing,” says Industry Leader

New Delhi [India], April 11 (ANI):
Siddharth Mittal
CEO and Managing Director of
Biocon
On Friday, Limited raised questions about who would cover the expenses of relocating their operations to the U.S., where pharmaceutical production costs exceed those in India and China.

I believe we can agree that production across various sectors shifted to China due to long-term cost advantages. Now, attempting to revert this trend comes with a significant expense,
Siddharth Mittal
said, speaking at the Carnegie Global Technology Summit.

“In our sector, let me provide an illustration: if a medication costs X dollars when produced in China, it would likely cost between 1.25X and 1.3X in India. Our research indicates that producing the same product in the U.S. could result in a price of around 2X. The question then becomes, who will bear the cost for relocating production to the United States?” he queried.

He mentioned that 50 percent of the medications in the United States originate from India, highlighting that the U.S. plays a crucial role as a major consumer for Indian drug manufacturers. Many businesses from India have established production facilities across the U.S.

“The United States represents our largest market, though it is highly sensitive to pricing. Additionally, the U.S. boasts an excellent research environment. We possess the necessary talent, and India demonstrates a strong grasp of the whole system. Certainly, the U.S. offers a robust research infrastructure, which I believe presents the initial opportunity,” he stated.

He additionally addressed China’s reliance on active pharmaceutical ingredients.

“India remains reliant on China for approximately 70 percent of its sourcing needs for starting materials or raw materials. Therefore, unless we tackle the whole value chain, the issue cannot be resolved,” he added.

Previously, on April 9, during his speech at the National Republican Congressional Committee dinner, U.S. President Donald Trump cautioned about upcoming tariffs on pharmaceuticals.

“Tariffs on pharma will be there because we don’t make our own pharma drugs; they are made in another country. The same packet in the US is priced at USD 10 or more. We are going to tariff pharma in such a way that companies will come rushing to us very soon. The advantage we have is, we are very big market. Very shortly, will announce a major tariff on pharma, and when these companies hear that, they will leave China and other countries because most of their products are sold here. And they will be opening their plants here,” Trump said.

Indian makers of generic medications have a substantial presence in the U.S. health sector, accounting for about 40% of all generics imported into the nation. During fiscal year 2024, India’s pharma exports to the United States amounted to roughly $8 billion, showing an 8 percent compounded yearly growth rate (CAGR) from fiscal year 2015 through 2024. (ANI)

(ANI)