Sun Pharma Provides Affordable Drug Supply to the US Market
New Delhi: Sun Pharma, India’s largest pharmaceutical company, has secured a Most Favoured Nation (MFN) pricing agreement with the US Medicaid program. This deal, signed on August 31, aims to mitigate the impact of potential tariffs on innovative pharmaceutical products. The MFN pricing ensures that the company will provide drugs at the lowest price available compared to other developed nations.
The agreement recognizes Sun Pharma’s investment in the US market and delays the implementation of Section 232 tariffs on innovative drugs for over two years. Under these tariffs, the US had announced a 100% duty on imports of innovative, patented drugs, with generic medicines facing even steeper tariffs starting in 2028. The deal is designed to enhance access to affordable medications for American patients.
Sun Pharma’s US market is crucial for its growth, contributing approximately 27% to its global revenue. Analysts estimate that the company’s sales of innovative drugs in the US are around $1 billion, with projections to rise to about $3 billion following its acquisition of Organon. Vishal Manchanda, an analyst at Systematix Group, noted that the agreement alleviates tariff concerns and positions Sun Pharma for significant growth without adversely affecting earnings.
The company is transitioning its US business focus from generics to higher-value specialty and innovative medicines. Sun Pharma ranks second in US dermatology prescriptions and is expanding its presence in dermatology, immunology, cutaneous oncology, and ophthalmology. The recent agreement aligns with similar deals made by eight other pharmaceutical companies to lower prices on treatments for various chronic and rare diseases.
Rick Ascroft, North America CEO of Sun Pharma, emphasized the company’s commitment to investment and expansion in the US, covering clinical development, sales, marketing, and manufacturing. The agreement also includes a pledge to bolster the US supply chain by contributing active pharmaceutical ingredients (APIs) to the Strategic Active Pharmaceutical Ingredients Reserve (SAPIR). Sun Pharma will supply 71.4 tons of clindamycin and 6.8 tons of doxycycline to support this initiative. The total number of pharmaceutical manufacturers with MFN agreements now stands at 26, covering 89% of the branded drug market in the US.
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