KUALA LUMPUR, July 23 — The United States’ plan to impose a 100 per cent levy on imported generic drugs from August 2028 will likely have a significant impact on Malaysian drug makers.
The US is Malaysia’s second biggest export destination for pharmaceuticals, comprising about 15 per cent of total pharmaceutical exports. Malaysia’s pharmaceutical exports reportedly increased 22 per cent year-on-year to US$1.3 billion in 2025.
“Although the US accounts for around 15 per cent of Malaysia’s pharmaceutical exports, the impact could be severe for companies dependent on that market,” Galen Centre for Health and Social Policy chief executive Azrul Mohd Khalib told CodeBlue.
“Malaysia should use the transition period to diversify exports and move into higher-value pharmaceutical products. It must not be dependent on the domestic market for its generics.”
President Donald Trump announced last Tuesday that generic drugs imported into the US would face zero tariffs for two years starting August 1, before a 100 per cent duty takes effect in August 2028 and rises to 200 per cent a year later.
Trump posted on social media that the phased schedule was intended to reshore generic pharmaceutical production into America, describing the escalation as a “penalty” for companies that don’t build plants and facilities in the US within the grace period.
Azrul explained that the tariffs would affect products imported into the US based on where they were manufactured, regardless of whether the manufacturer was Malaysian or foreign-owned.
Duopharma Biotech Bhd announced last February an RM65.08 million contract from the Malaysian government for it and Biocon Biologics Ltd India to supply recombinant human insulin to the Ministry of Health (MOH).
Biocon Biologics, which operates an insulin plant in Johor, will manufacture the product that will be distributed by Duopharma. Biocon Biologics’ manufacturing facility in Malaysia also supplies the US market.
“Biocon and Duopharma’s insulin supply to the Ministry of Health should not be directly affected, although there could be indirect consequences for production costs, investment and economies of scale,” said Azrul.
He warned that the US tariffs on generic drugs could add further pressure on local manufacturers already facing thin margins, preference for branded medicines, and cheaper imports from India and China.
“Manufacturers unable to compete in the US may also redirect more products into markets such as Malaysia. This will flood the market with cheap products and may compete directly with local manufacturers,” said Azrul.
“Government procurement should therefore consider supply security, quality, and domestic manufacturing capacity—not price alone.”
Pharmaniaga Berhad managing director Zulkifli Jafar complained recently about how local pharmaceutical companies were squeezed from both sides: doctors’ preference for innovator drugs and imported generics from China and India that are reportedly at least 20 per cent cheaper than Malaysian-made products.
