Trump Tariff on Pharma: US President Donald Trump has announced to impose 100 percent tariff on branded and patented medicines and their active ingredients. His decision may impact Indian pharmaceutical companies which have a significant presence in the innovative drugs segment in the American markets.
However, most Indian pharmaceutical exporters will be spared from this tariff as it does not include generic and unbranded medicines. Sun Pharma and Glenmark Pharmaceuticals are likely to be impacted the most because they focus more on patented products and have a commercial presence in the US specialty drugs segment.
What are patented products?
When a company has legal rights on a product, it is called patented. Similarly, when companies like Sun Pharma or Glenmark invest a lot of money and time in discovering a new medicine, they take its patent from the government. After getting the patent, no other company can make or sell that medicine for a certain period of time (usually 20 years). Due to this, when any one company has control over that medicine in the market, it also decides its price. This is the reason why branded and patented medicines are often expensive.
impact on sun pharma
Sun Pharma, India’s largest pharma company, has a good reputation in the American markets. The company’s patented medicines are sold on a large scale in the American markets. 30-35 percent of Sun Pharma’s total revenue comes from America alone. In the financial year 2025, global sales from Sun Pharma’s patented products will be US $ 1.2 billion.
85–90 percent of Sun Pharma’s patented products are sold in America only. With the imposition of tariff, these medicines will become more expensive. In particular, Sun Pharma’s specialty brands (Ilumya, Winlevi, Cequa, Sezaby) are expected to be impacted the most as all of them will come under the ambit of the tariffs.
impact on glenmark
For Glenmark, the biggest impact of the tariff may be seen on its key drug Ryaltris because it is a branded drug and its market share is growing rapidly in the US. With the imposition of 100% tariff, the price of the medicine will double. Due to this, there may be a decrease in its demand in the American markets.
impact on stock market
After Trump’s announcement on April 2, a huge decline was seen in the Nifty Pharma Index. It fell by 3.5-5 percent. During this period, shares of Sun Pharma and Glenmark also fell by 5-6 percent.
Also read:
