Domestic pharma companies are set to get some relief from the Trump administration’s tariffs on imported pharma products after the US included India among 19 jurisdictions eligible for zero tariffs on certain specialty medicines and their ingredients. The move is expected to benefit a small group of Indian companies including Sun Pharma, Syngene, Piramal Pharma, and Anthem Biosciences with high exposure to specialty drugs, contract manufacturing and complex therapies. The impact on the broader pharma sector from the move is likely to be moderate, experts said.
The relief is particularly relevant because the US had imposed a 100% tariff on imports of certain patented pharma products and associated ingredients under Section 232 of the Trade Expansion Act, 1962. The latest order removes that additional duty for qualifying specialty products from India. However, the benefit does not extend to all medicines sold by Indian companies in the US. Generic drugs, which are currently exempted from the Section 232 tariffs, face a separate tariff threat from 2028 under the Trump administration’s planned duties on imported generics.
“Proclamation 11020 states that such products and associated ingredients receive the Section 232 zero tariff rate if they are products of a jurisdiction that has a current or forthcoming trade and security framework agreement or if they meet an urgent US health need,” the US Commerce Department said.
According to the order, not every specialty or patented medicine exported from India to the US will be exempted. Companies will have to establish that their products fall within the categories covered by the order and meet the applicable rules on product classification and country of origin.
To be sure, the exemption covers specialty medicines for rare diseases, nuclear medicines, plasma-derived therapies, fertility drugs, cell and gene therapies and antibody-drug conjugates (ADCs). It also covers certain medical countermeasures and animal-health products.
Experts said Sun Pharma is likely to be among the main Indian beneficiaries given its large US specialty portfolio. “Sun Pharma stands to be one of the key beneficiaries because of its large US specialty portfolio among Indian pharma companies, including orphan-designated products such as Odomzo that fall under the zero tariff categories covering rare-disease drugs, ADCs and related ingredients,” said Abhijeet Porwal, research associate at Deven Choksey Research. The order gives Sun another layer of protection after its separate agreement with the US government earlier this month under which it agreed to offer certain medicines at lower prices in the US and secured more than two years of tariff relief for its innovative medicines portfolio.
The benefit could extend to companies involved in developing and manufacturing complex medicines. Anthem Biosciences, for instance, could see some indirect benefit through its APIs and intermediates business, including peptides, lipids and ADC-related products. Additionally, CDMOs such as Piramal Pharma and Syngene could also benefit from their capabilities in ADCs and cell and gene therapies although the actual benefit would depend on whether their products meet the conditions in the US order.
However, some analysts said the wider impact on Indian drugmakers could be limited. “The exemption is not going to make a difference as the category of drugs that are qualified in the announcement is not something that Indian players have exposure to as far as US markets are concerned,” said Vishal Manchanda, senior vice-president (institutional research) at Systematix Group.
At the moment, the bigger concern for domestic companies remains the proposed tariffs on generic drugs. In July, Trump said imported generic drugs would remain tariff-free for two years from August 2026, before facing a 100% tariff for one year and 200% thereafter. The administration has said the policy is intended to encourage drugmakers to establish manufacturing capacity in the US.
Source: The Financial Express
