Price pressures to intensify for drugmakers, says Sun Pharmaceutical

Sun Pharma expects global pricing strain due to policy shifts, as FY25 US sales rise 5.8% despite compliance challenges; specialty business lifts overall growth

Sun Pharmaceutical Industries expects pricing pressures on drug manufacturers to rise further, driven by geopolitical uncertainty, regulatory changes, and growing demands for cost-effective therapies from buyers across global markets.

 

In a letter to shareholders, Chairman and Managing Director Dilip Shanghvi said the company is focused on maintaining competitiveness by continuously offering value to patients, prescribers, and buyers across its markets.

 

“Reliable supply of safe medicines has become a priority for nations, leading to rising demand for on-shoring or near-shoring of pharma manufacturing. It is likely that price pressures on drug manufacturers may further increase,” Shanghvi noted. He added that Sun Pharma is responding to these developments by strengthening its branded portfolio and staying cost-competitive in the generics space.

 

Sun Pharma reported US sales of ₹16,200 crore in FY25, up 5.8 per cent year-on-year, contributing around 31 per cent of its total consolidated revenues. The company attributed this growth primarily to its specialty medicines business, which continued to gain traction. However, the generics business in the US remained under pressure due to compliance issues at some manufacturing facilities and rising competition in select products.

 

Commenting on pricing pressure, Abhay Gandhi, CEO – North America Business, Sun Pharmaceutical, said during the FY25 Q4 analyst call, “Pricing continues to be a product-specific issue, and there’s nothing that can be generalised. So product-specific, we continue to see pressure on pricing.” 

 

Sun Pharma is currently addressing US FDA regulatory action at three of its plants—Halol (under import alert), Mohali (non-compliance letter), and Dadra (OAI status). Corrective and preventive actions have been completed at Halol, and the company awaits FDA reinspection.

 

Globally, Sun Pharma’s consolidated revenues for FY25 rose 9 per cent to ₹52,000 crore, with EBITDA growing 17.3 per cent to ₹15,300 crore. Adjusted net profit grew by 19 per cent to ₹12,000 crore. Specialty business revenue grew 17.1 per cent, and its contribution to total revenue increased to 20 per cent.

 

The company said it will continue to invest in innovation and strengthen its global specialty pipeline, even as a significant portion of recent acquisitions—such as Checkpoint Therapeutics—are yet to begin contributing to revenue. Sun Pharma ended FY25 with a net cash position of $3.1 billion, which it says gives it headroom to pursue inorganic growth opportunities.

 

Looking ahead to FY26, the company expects mid to high single-digit revenue growth, with increased R&D spending—ranging between 6 to 8 per cent of sales—and a continued focus on cost control, operational efficiency, and supply chain resilience.

 

Richard Ascroft will be joining as CEO – North America, succeeding Abhay Gandhi. Ascroft is a seasoned biopharmaceutical executive with more than three decades of experience spanning commercial operations, market access, medical affairs, and corporate affairs across the US and global markets.

 

Most recently, he served as Senior Vice President and Business Unit Head of US Plasma-Derived Therapies at Takeda Pharmaceuticals, and was a member of both the US and global executive leadership teams. Ascroft will report to Aalok.