Indian drugmakers face risks as Trump eyes tariffs on US imports of pharma

US President Donald Trump said on Tuesday he intends to impose a "25 per cent or higher" levies on semiconductors and pharmaceutical imports, and raise it substantially over the course of a year, a move likely to hit India's sprawling pharmaceutical industry.

Most Indian generic drugmakers count the US as their largest market, with exports reaching $8.7 billion in fiscal 2024, or about 31 per cent of the industry's overall exports, according to the government-backed trade body Pharmaceuticals Export Promotion Council of India (Pharmexcil).

India's drugmakers export generic drugs to the US, offering a cost-effective alternate to expensive innovative drugs.

Nearly half of all generic prescriptions filled in the US in 2022 were supplied by Indian drugmakers and generated $408 billion in savings for the US healthcare system for the year, according to research firm IQVIA.

Following are India's major drugmakers relying heavily on the US market.

SUN PHARMACEUTICAL

India's largest drugmaker had 32 per cent of its total revenue come from the US market in fiscal 2024. Sun's MD Dilip Shanghvi told local media earlier this week that the extra tariffs, if imposed, will be passed on to consumers.

It exports to 100 countries and overseas sales accounted to 72.7 per cent of the company's total revenue in the year.

DR REDDY'S LABORATORIES

North America is the largest market for the company, contributing 47 per cent of its total sales in fiscal 2024.

The company relies on its key generic drugs in oncology and immunology therapies for sales in the region, which rose 28 per cent from a year earlier.

Reddy's, like other Indian drugmakers, is banking on yet to be launched generic weight-loss drugs for growth over the next few years in the US. 

CIPLA

India's third-largest drugmaker by revenue generated 30 per cent of its total revenue from North America in fiscal 2024, its second-biggest market.

The company is among the top 15 players in the US providing prescription drugs and supplies generic respiratory and oncology medicines.

BIOCON

It earned 44 per cent of its total revenue from the US, its largest market for the year ended March 2024, primarily driven by demand for its biosimilars which are copies of complex biologics drugs used to treat illnesses such as rheumatoid arthritis and cancer.

In 2022, Indian companies supplied 15 per cent of the volume of biosimilars in the US, according to IQVIA.

LUPIN

Sales in North America contributed to 37 per cent of overall fiscal 2024 sales, up 30 per cent from the previous year thanks to solid demand for the company's respiratory, antiretroviral generic drugs.

GLENMARK PHARMA

The company generated 26 per cent of its total revenue from North America, its second-biggest market, in fiscal 2024. The company is focusing on expanding its respiratory drug portfolio offerings.

ZYDUS

US is the largest market for the company, generating 46 per cent of its total revenue in 2024. The company distributes over 200 generic products in the market.

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