In a significant move that could reshape the global pharmaceutical landscape, the Trump administration has announced a 100% import tariff on branded or patented drugs, set to take effect from October 1. This policy primarily targets multinational pharmaceutical giants but could have far-reaching implications for the Indian pharmaceutical sector, which counts the United States as its largest export market.

Key Points of the New Policy

• 100% import tariff on branded or patented drugs
• Exemption for companies with existing or under-construction manufacturing facilities in the US
• Aim to boost domestic pharmaceutical manufacturing in the United States

Impact on Indian Pharmaceutical Companies

The Indian pharmaceutical industry, which exports significantly to the US, may face varying degrees of impact:

Potentially Less Affected Companies

• Biocon: Likely to remain unaffected due to its recently commissioned US manufacturing facility in New Jersey, representing an investment of over $30 million
• Cipla, Dr Reddy's Laboratories, and Lupin: These companies already operate manufacturing facilities in the US

Companies Facing Potential Impact

• Sun Pharma: May experience some impact until it announces expansion plans in the US

Uncertainty and Potential Challenges

The new policy raises questions about its scope and implementation:

• Unclear whether complex generics and specialty drugs from India could face scrutiny
• Uncertain impact on ongoing research collaborations and technology transfers between Indian and US pharmaceutical companies

Market Implications

This policy shift could lead to:

• Increased investment in US-based manufacturing facilities by Indian pharmaceutical companies
• Potential rise in drug prices for US consumers if companies pass on the tariff costs
• Possible disruption in the global pharmaceutical supply chain, particularly for specialized or patented medications

Industry Response

While official responses from Indian pharmaceutical companies are yet to emerge, the industry is likely to:

• Closely monitor the situation and adjust strategies accordingly
• Potentially accelerate plans for US-based manufacturing
• Explore partnerships with US-based facilities to mitigate the impact of the tariff

As the October 1 implementation date approaches, the global pharmaceutical industry will be watching closely to see how this policy unfolds and its potential ripple effects on drug pricing, availability, and international trade relations in the healthcare sector.

The Indian pharmaceutical sector is witnessing a surge of significant deal activity, highlighting its resilience amidst broader market challenges. Recent developments showcase the industry's focus on oncology treatments and biosimilars, with several major players securing important partnerships and agreements.

AstraZeneca and Daiichi Sankyo's Breakthrough in Breast Cancer Treatment

AstraZeneca and Daiichi Sankyo have achieved a significant milestone with their drug combination Enhertu with pertuzumab being accepted for metastatic breast cancer treatment. This development is expected to benefit Cohance Lifesciences, a key supplier in the production chain.

IPCA Laboratories Enters Biosimilar Market

IPCA Laboratories has made a strategic move into the biosimilar space by entering a technology transfer agreement with BioSimilar Sciences. The agreement focuses on a monoclonal antibody biosimilar targeting a $4.00 billion US market. The product launch is anticipated in 2027, marking IPCA's entry into this lucrative segment.

Glenmark's Billion-Dollar Deal with Hengrui Pharma

Glenmark Pharmaceuticals has secured an exclusive licensing deal with China's Hengrui Pharma for the cancer therapy Trastuzumab Rezetecan. The agreement involves an upfront payment of $18.00 million, with potential milestone payments exceeding $1.00 billion. This deal significantly bolsters Glenmark's oncology portfolio and global reach.

Generic Lenvima Settlements for Sun Pharma and Dr Reddy's

Sun Pharmaceutical Industries and Dr Reddy's Laboratories have reached settlements with Eisai Pharma to launch generic versions of Lenvima in the US market. Lenvima, a drug generating annual sales of $1.50 billion, is used in the treatment of various cancers. These settlements pave the way for more affordable cancer treatments in the US market.

Opportunity in Diabetes Care Market

Novo Nordisk's decision to phase out human insulin pens has created a substantial opportunity for domestic companies in India's diabetes care market. This move opens up a potential market worth Rs 600-800 crore, with companies like Lupin, Wockhardt Pharma, and Eris Lifesciences poised to capitalize on this opportunity.

The flurry of deals and market developments underscores the Indian pharmaceutical sector's dynamism and its growing importance in the global healthcare landscape. From oncology breakthroughs to strategic biosimilar investments and opportunities in diabetes care, Indian pharma companies are positioning themselves for significant growth and impact in key therapeutic areas.