India’s generic pharmaceutical companies are likely to continue business as usual despite US President Donald Trump’s 100% levy on pharmaceuticals. The tariff is targeted at branded and patented medicines, which may not directly impact generic companies. However, some companies like Sun Pharma, which generates a significant portion of its revenue from patented drugs in the US, may face headwinds. Sun Pharma’s drug sales in the US totalled $1.1 billion in FY25, accounting for around 17% of its total revenue.
Companies with manufacturing bases in the US, such as Sun Pharma, Dr Reddy’s, and Cipla, may shift production of higher-value specialty and niche drugs from India to their American facilities to cushion the blow. This move could drive companies to diversify export markets, recalibrate global strategies, and set up manufacturing bases in the US to safeguard access to the lucrative market.
Industry experts believe that Indian pharma companies need to diversify markets and innovate in complex generics and biosimilars to stay resilient in a changing global trade landscape. India’s pharma exports to the US were close to $10 billion last year, and the country services around 35% of US prescriptions with affordable generics. The Indian Pharmaceutical Alliance secretary general, Sudarshan Jain, emphasized that India plays a vital role in US healthcare by ensuring a steady supply of affordable medicines.
The pharma sector is awaiting more clarity on the announcement, as it did not specify whether specialty drugs, niche, or complex generic drugs are under its ambit. There is also uncertainty over the definition of “branded” drugs, which could impact companies like Granules India. Despite the uncertainty, experts believe that Indian pharma companies will need to reinforce their cost-efficiency advantage in bulk drugs and APIs, an area where the US is likely to favor India over other suppliers. They will also need to invest in next-generation opportunities, such as complex generics, peptides, and biosimilars, to remain competitive.