2 hours ago
2
ARTICLE AD BOX
US President Donald Trump's announcement of a 100% tariff connected imported "branded and patented pharmaceutical products" has rattled the planetary pharma industry, though Indian generic cause makers are mostly expected to stay unaffected for now.Trump, successful a station connected Truth Social connected Thursday, stated: "Starting October 1st, 2025, we volition beryllium imposing a 100% Tariff connected immoderate branded oregon patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant successful America. ‘IS BUILDING’ volition beryllium defined as, ‘breaking ground’ and/or ‘under construction.’ There will, therefore, beryllium nary Tariff connected these Pharmaceutical Products if operation has started.
"The announcement sent shockwaves crossed Indian pharma stocks, raising concerns that the scope of the tariffs could aboriginal beryllium extended to analyzable generics, biosimilars, and different precocious formulations, apical officials told ET.Industry officials noted that this comes amid an ongoing US authorities probe nether Section 232 of the US Trade Expansion Act, which is evaluating whether pharma imports airs a nationalist information risk.
A last determination is expected aboriginal adjacent year. The determination is seen arsenic a portion of a broader propulsion to onshore pharmaceutical manufacturing successful the US, trim overseas dependency, and make home jobs.
Why are Indian generics spared?
India exports a ample measurement of low-cost generic medicines that bash not autumn nether the branded oregon patented category. This explains wherefore analysts judge the tariff determination whitethorn not disrupt shipments close away.Currently, Indian pharmaceutical exporters are mostly unaffected arsenic the state chiefly supplies unbranded generic drugs and formulations to the US, Suresh Subramanian, nationalist beingness sciences person astatine EY Parthenon told ET.However, helium warned that if the tariff authorities is broadened to see biosimilars and analyzable generics, large Indian firms specified arsenic Sun Pharma, Cipla, Lupin, and Dr Reddy’s could look fiscal strain."Unless we spot the existent order, it is excessively aboriginal to regularisation retired anything," Subramanian added.
Which steadfast is apt to beryllium astir exposed?
A prime radical of large Indian pharmaceutical manufacturers dominates exports to the US market, contributing astir 70% of each shipments. Among Indian majors, Sun Pharmaceuticals could consciousness the vigor if branded and specialty drugs are included successful the tariff regime. The institution has steadily expanded its US portfolio of specialty and branded medicines. Its planetary specialty income touched $1.2 cardinal successful FY25, accounting for astir 20% of yearly revenue."The 100% tariff connected imports of branded medicine announced by the US whitethorn person an interaction connected the financials of Sun Pharmaceuticals," Vishal Manchanda, pharma expert astatine Systematix Group told ET."Out of the company's full yearly gross of astir $6 billion, astir 15% comes from its branded medicine income successful the US," Manchanda said.He, however, added that, "Since determination is nary good people connected the tariff announcement, it whitethorn beryllium premature to remark connected the impact. The tariff interaction would besides chiefly beryllium connected what worth and from which countries Sun procures these branded medicines from."This comes arsenic Sun Pharma has a beardown beingness successful the US, with its office successful New Jersey and a manufacturing works successful Massachusetts, could assistance soften the impact.On the different hand, Dr Reddy's shows important hazard exposure, with 47% of its net coming from the US market, the highest amongst its competitors, according to the ET report.Nomura projects the company's US net to scope $1.5 cardinal successful FY26, making it peculiarly susceptible to immoderate tariff modifications.Various pharmaceutical companies amusement antithetic levels of vulnerability. Lupin anticipates US revenues of $1.1 cardinal successful FY26, with their US manufacturing facilities contributing $70-80 million, representing 6-7% of full earnings, arsenic stated by the organisation.
Higher hazard for large planetary firms
India, Belgium, Italy, and China besides export drugs to the US but mostly successful the generic space. The bigger interaction is apt to autumn connected multinational companies from Ireland, Switzerland, Germany, and Singapore, which predominate the US marketplace for patented medicines.US import statistic from 2024 bespeak full pharmaceutical imports valued astatine $212.82 billion, with India contributing $12.73 billion, equivalent to 5.98%.In comparison, Ireland led with $50.35 cardinal (23.66%), followed by Switzerland astatine $19.03 cardinal (8.94%), and Germany astatine $17.24 cardinal (8.10%). These European nations, specialising successful high-value branded and patented medications, are apt to acquisition the strongest archetypal effects of the caller tariff policy, according to a GTRI analysis.
