US President Donald Trump’s announcement of a 100% tariff on imported “branded and patented pharmaceutical products” has rattled the worldwide pharma trade, although Indian generic drug makers are largely anticipated to stay unaffected for now.Trump, in a submit on Truth Social on Thursday, said: “Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America. ‘IS BUILDING’ will be defined as, ‘breaking ground’ and/or ‘under construction.’ There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started.“The announcement despatched shockwaves throughout Indian pharma shares, elevating issues that the scope of the tariffs might later be prolonged to advanced generics, biosimilars, and different superior formulations, high officers informed ET.Industry officers famous that this comes amid an ongoing US authorities probe below Section 232 of the US Trade Expansion Act, which is evaluating whether or not pharma imports pose a nationwide safety threat. A ultimate determination is anticipated early subsequent 12 months. The transfer is seen as part of a broader push to onshore pharmaceutical manufacturing within the US, cut back overseas dependency, and create home jobs.
Why are Indian generics spared?
India exports a big quantity of low-cost generic medicines that don’t fall below the branded or patented class. This explains why analysts consider the tariff transfer might not disrupt shipments instantly.Currently, Indian pharmaceutical exporters are largely unaffected because the nation primarily provides unbranded generic medicine and formulations to the US, Suresh Subramanian, nationwide life sciences chief at EY Parthenon informed ET.However, he warned that if the tariff regime is broadened to incorporate biosimilars and sophisticated generics, main Indian corporations resembling Sun Pharma, Cipla, Lupin, and Dr Reddy’s might face monetary pressure.“Unless we see the actual order, it is too early to rule out anything,” Subramanian added.
Which agency is prone to be most uncovered?
A choose group of main Indian pharmaceutical producers dominates exports to the US market, contributing roughly 70% of all shipments. Among Indian majors, Sun Pharmaceuticals might really feel the warmth if branded and specialty medicine are included within the tariff regime. The firm has steadily expanded its US portfolio of specialty and branded medicines. Its international specialty gross sales touched $1.2 billion in FY25, accounting for practically 20% of annual income.“The 100% tariff on imports of branded medicine announced by the US may have an impact on the financials of Sun Pharmaceuticals,” Vishal Manchanda, pharma analyst at Systematix Group informed ET.“Out of the company’s total annual revenue of about $6 billion, nearly 15% comes from its branded medicine sales in the US,” Manchanda mentioned.He, nevertheless, added that, “Since there is no fine print on the tariff announcement, it may be premature to comment on the impact. The tariff impact would also primarily depend on what value and from which countries Sun procures these branded medicines from.”This comes as Sun Pharma has a powerful presence within the US, with its headquarters in New Jersey and a producing plant in Massachusetts, might assist soften the impression.On the opposite hand, Dr Reddy’s reveals important threat publicity, with 47% of its earnings coming from the US market, the very best amongst its opponents, in keeping with the ET report.Nomura initiatives the corporate’s US earnings to achieve $1.5 billion in FY26, making it notably prone to any tariff modifications.Various pharmaceutical corporations present totally different ranges of vulnerability. Lupin anticipates US revenues of $1.1 billion in FY26, with their US manufacturing services contributing $70-80 million, representing 6-7% of complete earnings, as said by the organisation.
Higher threat for main international corporations
India, Belgium, Italy, and China additionally export medicine to the US but largely within the generic area. The greater impression is prone to fall on multinational corporations from Ireland, Switzerland, Germany, and Singapore, which dominate the US market for patented medicines.US import statistics from 2024 point out complete pharmaceutical imports valued at $212.82 billion, with India contributing $12.73 billion, equal to five.98%.In comparability, Ireland led with $50.35 billion (23.66%), adopted by Switzerland at $19.03 billion (8.94%), and Germany at $17.24 billion (8.10%). These European nations, specialising in high-value branded and patented drugs, are prone to expertise the strongest preliminary results of the brand new tariff coverage, in keeping with a GTRI evaluation.