Pharma Marking – Indian Pharmaceutical Companies And U.S. Border Tax

Recent news reports reveal that while India contributes nearly a third of the overall volume of drugs consumed in the U.S., domestic pharmaceutical companies in the country exporting drugs to the U.S. may be impacted by BAT, the border adjustment tax proposed under the Republican plan to revamp corporate taxes.

According to reports, India exports approximately 40% of their overall generic drug sales from companies including Lupin, Glenmark, and SunPharma.

While the border adjustment tax bill hasn’t yet passed, a BofA Merrill Lynch Global Research analysis report revealed that attempts by the U.S. to adjust direct taxes at the border might infringe World Trade Organization compliance.

Analysts maintain the BAT bill, if passed in its present format, could erode profitability by 17% to 46%, clearly damaging to domestic companies who export goods to the U.S. Essentially, the plan to revamp corporate taxes is an effort to boost manufacturing in the U.S. and exempt export revenues from corporate taxation, while taxing imports coming into the country such as pharmaceutical drugs from India and other countries.

Some reports indicate Sun Pharmaceuticals may grow weak in trade for the mid-term, as the drug maker receives approximately half of its revenue through U.S. exports. Whether the new President’s policies will impact domestic pharmaceutical companies around the world and what those effects may be remains to be seen.

As a supplier of pharma marking and coding solutions, REA JET is keenly aware of the subject and concerned about how BAT and other policies may impact global trade. For all of your pharmaceutical printing needs, trust REA JET for reliable, cost-effective solutions.