US President Donald Trump has announced the imposition of 100 percent tariff on branded and patented drugs and their active ingredients. Their decision may impact Indian pharmaceutical companies, which have a significant presence in the field of innovative medicines in the US markets. However, most Indian pharmaceutical exporters will be exempted from this tariff as it does not include generic and non-branded drugs. Sun Pharma and Glenmark Pharmaceuticals are likely to be most impacted as they focus more on patented products and have a commercial presence in the US specialty drugs sector.
What are patent products?
When a company has legal rights to a product it is called a patent. Similarly, when companies like Sun Pharma or Glenmark invest a lot of money and time in discovering a new drug, they take its patent from the government. After getting a patent, no other company can make or sell that medicine for a certain period (usually 20 years). Due to this, when any one company controls that medicine in the market, it also decides its price. This is why branded and patent 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 patent medicines are sold extensively in the US markets. 30-35 per cent of Sun Pharma’s total revenue comes from the US alone. Global sales of Sun Pharma’s patented products will be US$ 1.2 billion in fiscal year 2025. 85-90 percent of Sun Pharma’s patent products are sold in the US. With the imposition of tariff, these medicines will become more expensive. Notably, Sun Pharma’s specialty brands (Ilumya, Vinlevi, Sequa, Sezabi) are expected to be most impacted as all of them will fall under the ambit of the tariffs.
impact on glenmark
For Glenmark, the biggest impact of the tariffs may be seen on its key drug Ryaltris as it is a branded drug and its market share is growing rapidly in the US. If 100 percent tariff is imposed, the price of the medicine will double. This may reduce its demand in the American markets.
impact on stock market
After Trump’s announcement on April 2, a huge fall was seen in the Nifty Pharma index. It declined by 3.5-5 percent. During this period, shares of Sun Pharma and Glenmark also fell by 5-6 percent.