US Pushes to Reshore Generic Drug Manufacturing: Potential Impact on Indian Pharma

The US Congress is making a renewed push to bring generic drug manufacturing back home. Congresswoman Claudia Tenney (NY-24) has reintroduced the Producing Incentives for Long-term Production of Lifesaving Supply of Medicines (PILLS) Act, a legislative initiative designed to encourage pharmaceutical companies to relocate their generic drug production to the United States.

The move is primarily driven by concerns over the heavy dependence on India and China for the supply of essential medicines. These nations have become dominant players in the generic drug industry due to their lower production costs and relatively relaxed manufacturing standards. However, this centralisation has raised fears of potential supply chain disruptions and compromised drug quality.

Key Features of the PILLS Act

The PILLS Act proposes a series of tax incentives for pharmaceutical manufacturers that shift their entire production process—including raw material sourcing, drug formulation, and quality testing—to the United States. The goal is to reduce America’s reliance on foreign suppliers while enhancing national security, creating domestic jobs, and ensuring a stable supply of high-quality generic medicines.

Congresswoman Tenney emphasised the urgency of the initiative, stating: “Drug manufacturing has moved overseas, putting American jobs and the security of our essential medical supply chains at risk. By strengthening tax incentives for domestic drug production, the PILLS Act will help prevent dangerous supply chain disruptions, reinforce our pharmaceutical security, and create American jobs.”

Concerns Over US Drug Supply Chains

The reliance on foreign nations for pharmaceuticals has been a growing issue. Zach Mottl, Chairman of the Coalition for a Prosperous America (CPA), highlighted the escalating crisis in the US, where more than 90% of all prescriptions are for generic drugs. Since 2002, imports from India have increased 35 times, while imports from China have surged 165 times. The PILLS Act is viewed as a necessary intervention to counteract this overdependence and safeguard domestic drug availability.

Similarly, David Sanders, Founder and Board Member of Securing America’s Medicines and Supply (SAMS), supported the initiative, stating that the Act aligns with the broader mission to reshore essential medicines, including generic drugs, biologics, and biosimilars, through targeted tax credits.

Potential Impact on Indian Pharma

India is one of the leading leading suppliers of generic drugs to the US. Many Indian pharmaceutical companies have built their business models around exporting to the US market. If the PILLS Act succeeds in attracting more pharmaceutical production back to the US, Indian manufacturers could face a potential decline in export demand and increased competition from US-based production units.

According to the news report, the key concerns for Indian pharma firms with exposure to the US include:

• Reduced export demand – If US pharmaceutical companies are incentivised to manufacture domestically, demand for imports from India may decline.
• Increased regulatory scrutiny – Stricter US policies could lead to heightened compliance requirements for Indian firms.
• Potential price pressures – As the US looks to stabilise its domestic supply chain, Indian firms may need to adjust pricing strategies to remain competitive.

What Lies Ahead?

While the PILLS Act is yet to be passed, it signals a growing shift in US pharmaceutical policy towards self-sufficiency. Indian pharma giants such as Sun Pharma, Dr. Reddy’s Laboratories, Cipla, and Aurobindo Pharma, have substantial exposure to the US market.

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