Source: CNA
Date: 30th September 2025

100% duties on branded drugs raise questions for supply chains, pricing, and future investment.

The United States’ decision to impose a 100% tariff on branded and patented pharmaceutical products from October 1 has created uncertainty for Singapore’s pharmaceutical sector.

While some companies with manufacturing facilities in the U.S. may be insulated, others warn of possible knock-on effects across global supply chains. Industry groups note that the tariffs could disrupt sourcing, partnerships, and timelines, with the risk of higher costs translating into affordability and access challenges for patients worldwide.

Pharmaceutical exports are a key component of Singapore’s trade, accounting for roughly 13% of the country’s shipments to the U.S. Experts say the direct impact may initially be limited, as much of Singapore’s output consists of active pharmaceutical ingredients rather than finished products.

However, given the complexity of tariff rules and the dependence on branded goods, uncertainties remain. The announcement reinforces long-standing concerns over shifting U.S. trade policy and the difficulty companies face in adapting to sudden changes.

The tariffs also raise broader questions over drug pricing and manufacturing strategies. Relocating production back to the U.S. could increase costs unless offset by changes in corporate tax structures, while separating product lines by geography could disrupt efficiencies and investment plans.

For Singapore, which is positioning pharmaceutical manufacturing as a critical growth sector, the development underscores the vulnerability of export-dependent industries to external policy shifts and highlights the need for diversified market strategies.

For global importers, exporters, and shippers, the new tariffs create additional complexity in pharmaceutical logistics.

Higher duties on branded drugs could alter established trade flows, forcing companies to reroute supply chains, adjust sourcing strategies, or rely on alternative markets.

Shippers face heightened uncertainty in capacity planning, with sudden shifts in demand potentially driving up costs and causing bottlenecks in multimodal transport.

Exporters in Asia risk losing competitiveness in the U.S. market, while importers may be forced to absorb higher prices or seek generics, intensifying pressure across the global supply chain.