By Rica Bhattacharyya

Copyright indiatimes

Indian generic drug makers are not likely to face any immediate disruption from the 100% tariff imposed on “patented and branded” pharmaceutical imports announced by US President Donald Trump.However, the announcement posted on social media on Thursday, rattled pharma stocks in India amid lingering concerns that the scope could be expanded to include complex generics, biosimilars and other advanced formulations, top industry officials said.The concerns are on account of an ongoing US government investigation under Section 232 of the US Trade Expansion Act to assess if pharma imports pose a threat to national security, the decision of which is expected early next year.On the face of it, Indian pharma will not be impacted as the country mostly exports unbranded generic drugs and formulations to the US, said Suresh Subramanian, national life sciences leader at EY Parthenon.Live EventsHowever, if the tariff is expanded to biosimilars and complex generics, then several top Indian companies-such as Sun Pharma, Cipla, Lupin, Dr Reddy’s, and others-will take a hit, he added. “Unless we see the actual order, it is too early to rule out anything,” Subramanian said.As of now, there is no formal announcement by the government and all information is based on social media posts, which is leading to a lot of speculation and apprehension, he noted.The new tariff, effective from October 1, will not apply to companies who have already built, or are building manufacturing plants in the US, Trump clarified in his social media post.STOCKS DOWNBSE Healthcare index ended 2% down on Friday.Manoj Mishra, partner and tax controversy management leader at Grant Thornton Bharat, is of the view that while companies manufacturing branded products abroad for the US may face headwinds, domestic generic producers could see near-term gains as higher prices for branded drugs push demand toward cost-effective alternatives.The move by the US is part of a broader push to onshore US pharma manufacturing, create jobs and reduce foreign dependency. Pharmaceuticals had so far been exempted from US reciprocal tariffs.Analysts are of the view that India’s largest drug maker Sun Pharmaceuticals could take a hit on its Ebitda as it has been growing its footprint in specialty and branded products, particularly in the US.Sun Pharma did not respond to an ET query as of press time on Friday.The company has been growing its footprint in specialty and branded products, particularly in the US. Earlier this year, its chairman and managing director Dilip Shanghvi told investors the company is betting on “specialty becoming an increasingly important part” of its business.Sun Pharma’s global specialty sales stood at $1,216 million at the end of FY25, accounting for 20% of its total annual sales.”The 100% tariff on imports of branded medicine announced by the US may have an impact on the financials of Sun Pharmaceuticals,” said Vishal Manchanda, pharma analyst at broking firm Systematix Group. “Out of the company’s total annual revenue of about $6 billion, nearly 15% comes from its branded medicine sales in the US.”He, however, added, “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.”Also, Sun Pharma has a well-established footprint in the US headquartered in Princeton, New Jersey, including a production plant in Massachusetts.The impact of the tariffs is likely to hurt global drug makers that have a heavy exposure to the US market for their branded and patented drugs.Among the leading countries that export medicines to the US are Ireland, Switzerland, Germany and Singapore, followed by India, Belgium, Italy and China. Add as a Reliable and Trusted News Source Add Now!
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(You can now subscribe to our Economic Times WhatsApp channel)Read More News ongenericsUS pharma industrypharma importstariff on medicine importsSun Pharmaceuticals impactGrant Thornton Bharattrump(Catch all the Business News, Breaking News, Budget 2025 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online….moreless