US market remained a drag for Indian pharma in Q3 amid pricing pressure

The US market stayed a weak spot for Indian pharma companies in Q3FY26 amid sustained pricing pressure in generics, heightened competition and product-specific challenges

The United States market remained a weak spot for Indian pharmaceutical companies during the third quarter of the financial year (Q3FY26).

 

This reflects the sustained pricing pressure on generics, heightened competition and company-specific product challenges, even as firms stepped up launches of complex and innovative therapies to cushion the impact.

 

Analysts remain cautious on the near-term outlook for the US generics market. According to Nilaya Verma, chief executive officer (CEO) and co-founder of Primus Partners, pricing pressure in US generics is unlikely to fully bottom out in FY27.

 

“Fierce competition, channel consolidation and commoditisation are expected to keep prices under pressure through FY27, limiting growth for Indian pharma companies,” he said.

 

However, he added that a gradual shift towards complex, niche and innovative products such as peptides, injectables, biosimilars and specialty drugs could meaningfully offset generics weakness over the next 12 to 24 months. This is given their relatively higher pricing power and lower competitive intensity.

 

Sun Pharmaceutical Industries reported largely flat performance in the US, with formulation sales inching up just 0.6 per cent year-on-year (Y-o-Y) to $477 million in Q3.

 

Growth in its innovative medicines portfolio was offset by a decline in the generics business due to increased competition for certain products. 

 

The US market accounted for about 27.5 per cent of Sun Pharma’s consolidated sales for the quarter. During the period, the company launched three new generic products and rolled out Unloxcyt for advanced cutaneous squamous cell carcinoma, alongside Leqselvi, with the management indicating encouraging early physician feedback and initial distributor orders.

 

Dr Reddy’s Laboratories saw a sharper fall in its North America business, with Q3 revenues declining 12 per cent Y-o-Y to about ₹2,964 crore, and 9MFY26 revenues also down 12 per cent.

 

The decline was largely driven by lower sales of Revlimid (lenalidomide) and increased price erosion across key products.

 

Revlimid, once a major revenue contributor, has faced significant headwinds due to sharp price erosion and rising competition following multiple generic entrants, weighing heavily on Dr Reddy’s US revenues.

 

Despite the pressure, the company continued to expand its pipeline, launching six new products during the quarter and filing four new abbreviated new drug applications (ANDAs) with the United States Food and Drug Administration (USFDA).

 

Cipla’s North America business remained under pressure, with quarterly revenues falling 22 per cent to ₹1,485 crore, primarily due to ongoing lanreotide supply chain disruptions. While the India business remained resilient, the US weakness dragged overall performance.

 

The management, however, expressed confidence in recovery over the medium term, citing a strong FY27 pipeline. It includes four major respiratory launches such as gAdvair, the planned launch of gVictoza, and multiple peptide products.

 

In contrast, Alembic Pharmaceuticals outperformed peers, posting 6 per cent growth in its US generics business to ₹553 crore during the quarter, despite broader industry headwinds.

 

 The growth was supported by steady product launches and volume expansion in existing products, partially offsetting continued pricing pressure.

 

The company launched two products in the US during the quarter and received seven ANDA approvals, taking its cumulative approvals to 232.

 

The management indicated that new product-driven growth of 7–8 per cent annually is likely to continue. It would be aided by investments in injectables, pre-filled syringes and ophthalmic manufacturing lines.