Siddharth Mittal, CEO of Biocon Limited, has questioned the feasibility of shifting pharmaceutical manufacturing back to the US due to higher costs. At the Carnegie Global Technology Summit, he pointed out that Indian companies cannot afford to bring back manufacturing to the US from China, where production costs are lower. According to Mittal, a drug manufactured in China costs 1.25-1.3 times its production price in India, while in the US, it would double in cost. He asked who would bear the additional expense.
Mittal also highlighted the US as a significant market for Indian pharmaceuticals, with 50% of its drugs coming from India. Many Indian companies have set up manufacturing plants in the US to tap into this market. He emphasized the importance of addressing the entire value chain, including raw materials, as India still relies on China for 70% of its starting materials.
US President Donald Trump has warned of impending tariffs on pharma imports, citing the advantage of the US being a large market. He claimed that tariffs will encourage companies to set up manufacturing plants in the US to avoid costs. However, Mittal’s concerns highlight the complexity of this issue, showcasing the logistical and financial difficulties of shifting production to the US.