00:00He said in a Truth Social post last night that he intends to push through a 100 percent tariff on
00:07generic drugs, effective August 1st, 2028, if companies don't return manufacturing to the U.S.
00:15And this tariff would then be boosted to 200 percent a year later in 2029.
00:21OK, 100 percent, 200 percent. But unusually for this president, this would not start until August 2028.
00:29So that makes me think that this is all about drawing some lines in the sand and, you know, kind
00:37of setting up a negotiation, a long term negotiation.
00:41I mean, the timing is interesting. Some analysts have noted that by the time the 200 percent tariff would in
00:50theory be coming through, you know, his administration will not be in power anymore at that point.
00:55And so it would really be up to the next administration.
00:58We have seen some commentators suggesting that, you know, this would be rolled back potentially by by another administration.
01:08It is, you know, there are many challenges associated with this for the generic drug industry, partly just because, you
01:15know, unlike makers of branded drugs,
01:18generic drug makers, generic drug makers actually don't produce very much in the U.S.
01:23And that's because the U.S. is such a low cost market for generic drugs.
01:27And it really depends on a supply chain in in lower cost places for manufacturing.
01:35Where are most generic drugs manufactured?
01:41So the majority would be in India.
01:44It's a it's a big place for manufacturing.
01:46Yeah.
01:47OK. And what I didn't know, which I found out from your reporting, generic treatments account for more than 90
01:53percent of U.S. prescriptions.
01:55That is huge. Has it always been that level?
01:59Oh, that's a good question.
02:00If it's always been that level that I don't know.
02:03But it is at that level now, it's, you know, 90 percent of prescriptions, but I think something like 12
02:09percent of costs.
02:11And so you can see that that disconnect.
02:15You know, the U.S. is an expensive market for branded drugs, as we have all discussed, you know, so
02:21many times.
02:22But it's actually cheaper to buy generic medicines in the U.S. than it is in in a lot of
02:29other wealthy markets.
02:32Naomi, I thought it was interesting that you said that most of the generic drugs that we get in the
02:37U.S. are made in India.
02:38So you wonder whether this is a broadside at India overall, an attempt to just tariff imports from India.
02:44But you point out in your reporting that there's a trade pact between the U.S. and India that was
02:52struck in February, which makes a certain stipulation about generic drugs.
02:56Can you just explain what what happened in February and how this threat affects that or doesn't?
03:04So, I mean, first of all, we should say that we'll have to see how all of this plays out.
03:09You know, we're discussing true social posts right now, not official, you know, policy that has gone through, you know,
03:20lots of review and thought and discussion.
03:22So just setting that as a first point, I think this has unsettled Indian drug makers.
03:30You know, they're very surprised by this.
03:38I guess that there potentially whether there would be a carve out for Indian drug makers, you know, not sure.
03:47We'll have to see.
03:48Indian drug makers have said that for them, it's not practical to move operations to the U.S.
03:55And that to do that, they would probably have to raise prices.
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