Synopsis : The US will impose a 100% tariff on branded and patented drugs starting October 1, but generic drugs remain exempt. Analysts say Sun Pharma faces the biggest exposure, while the broader Indian pharma sector may see minimal disruption.
The United States has announced a 100% tariff on branded and patented pharmaceutical imports beginning October 1, 2025, sparking concerns across the global pharma industry. However, analysts believe the impact on most Indian drug makers will be limited, with Sun Pharma emerging as the only major firm significantly exposed to the move.
According to HSBC Global Investment Research, Sun Pharma’s patented drug sales in the US accounted for USD 1.1 billion in FY25, nearly 17% of total revenue and contributing 8–10% to consolidated EPS. With the new tariffs, the company faces headline risks, though the earnings impact will depend on how quickly supply chains are restructured.
The tariffs do not apply to generic (off-patent) medicines, which dominate Indian pharma exports to the US. Analysts at Crisil Ratings noted that about 20% of India’s pharmaceutical exports go to the US, and most of these are generic, making the tariff impact on other Indian companies negligible.
HSBC added that Sun Pharma could mitigate risks by shifting manufacturing to its three plants in the US or partnering with Contract Development and Manufacturing Organizations (CDMOs) that already have US-based operations. While such transitions could take 6–24 months, the company’s strong cash reserves of over USD 3 billion provide room for investment in new capacity or acquisitions if required.
Despite the uncertainty, analysts believe that the largely non-discretionary nature of patented medicines means costs could be passed through to customers, cushioning the financial hit. Nonetheless, the development highlights the vulnerability of Indian drug makers with branded portfolios in global markets.
Disclaimer : This article is for informational purposes only and should not be taken as financial or investment advice. Readers are encouraged to consult professional advisors before making investment decisions.
