Trump-Proposed Tariffs Threaten Generic Drug Supply, Sandoz Warns Patients Will Pay

President Donald Trump announced in July that imported generic medicines could be subject to a 100 % tariff beginning in 2028, potentially rising to 200 % a year later. The proposal is intended to encourage manufacturers to shift production to the United States. Sandoz Group AG, one of the world’s largest off-patent drugmakers, warned that such tariffs would force companies either to raise prices or stop supplying the affected products, leaving U.S. patients to bear the cost.

CNBC

Generic drugs account for roughly nine out of ten prescriptions in the United States but represent a modest share of total drug spending because of their lower prices. Most of the active pharmaceutical ingredients for these generics are produced outside the United States. Current Section 232 pharmaceutical tariffs do not apply to generics, making Trump’s proposal a new policy shift.

CNBC

Sandoz, a Swiss-listed company that derives about one-quarter of its revenue from North America (including Canada), is positioning itself to benefit from a wave of patent expirations. The firm plans to more than double its annual net sales by 2035, with the majority of growth expected from biosimilar medicines—biological drugs that replicate already-approved therapies after patent loss.

KSL-TV

• Generic and biosimilar drugs represent ~90 % of U.S. prescriptions.

KSL-TV

• Sandoz’s share price rose as much as 5 % on the day of its capital-markets briefing before settling about 1 % lower in afternoon trading.

CNBC

• The company targets a net-sales increase of over twofold by 2035 and aims to push its core profit margin above 30 %.

Sandoz CEO: Tariffs Would Raise Drug Costs

• Sandoz plans to expand its biosimilar portfolio to 100 products by 2040, up from 13 at present.

KSL-TV

• It expects mid-to-high single-digit constant-currency growth in total annual net sales from 2025 to 2030.

KSL-TV

Sandoz CEO Richard Saynor told CNBC that “patients pay the tariff” and that no manufacturer will continue to supply a product at a material loss, leaving the options of price increases or cessation of supply. He added that Sandoz maintains a “very good dialogue” with the Trump administration and would welcome investment in the United States if broader reforms encourage domestic production of generics and biosimilars.

KSL-TV

President Trump framed the tariffs as a means to spur U.S. drug manufacturing, stating that imported generics could face 100 % tariffs from 2028, potentially rising to 200 % the following year.

CNBC

• “So you either then have a choice of putting the price [up] or not supplying the product.” — Donald Trump, cost of president

CNBC

• “) administration sees companies like Sandoz as part ?of the solution, not part of the problem," Saynor told Reuters.” — Richard Saynor, sandoz CEO

KSL-TV

No source provides a definitive estimate of how much patient out-of-pocket costs would rise under the proposed tariffs, nor does any outlet confirm whether the administration will finalize the tariff schedule.

Sandoz CEO: Tariffs Would Raise Drug Costs

The tariff proposal is slated to take effect in 2028, with a possible increase in 2029. Sandoz’s capital-markets day on September 8 highlighted its biosimilar growth strategy and indicated openness to U.S. investment, suggesting the company may seek to mitigate tariff impacts through domestic manufacturing initiatives.

Sandoz CEO: Tariffs Would Raise Drug Costs