Key Points:
- Sun Pharma share price dropped 5% after Trump’s 100% US tariff on branded drugs.
- Reduced imports could raise drug costs and limit availability.
- Nifty Pharma index fell 2.3% on investor concerns.
Sun Pharmaceutical Industries Ltd. shares dropped nearly 5% on Friday after US President Donald Trump announced a 100% tariff on branded pharmaceutical products. The Sun Pharma share price opened at ₹1,547.25, down 4.96%, leading the Nifty Pharma index lower, which fell 2.3% with all constituent stocks in negative territory.
The tariff, effective October 1, 2025, applies to patented or branded pharmaceuticals imported into the US unless a company is constructing or has started building a manufacturing plant in the United States.
“Starting October 1st, 2025, we will be imposing a 100% tariff on any branded or patented pharmaceutical product, unless a company is building their pharmaceutical manufacturing plant in America,” Trump wrote on social media Thursday. “There will, therefore, be no tariff on these pharmaceutical products if construction has started.”
Incentivizing local production
The tariff aims to incentivize local pharmaceutical manufacturing in the US, encouraging companies to build or expand production facilities domestically. Industry experts say this could enhance national healthcare security by reducing dependence on imports for critical medicines. However, the move may disrupt global supply chains, particularly for Indian drugmakers, which are major suppliers of both generic and branded medicines to the US market.
Analysts warn that imported drug costs could rise, potentially affecting the affordability of branded medicines for US patients. “The policy could push prices higher for certain drugs unless domestic manufacturing scales quickly,” said a Mumbai-based equity analyst. This could have a direct impact on healthcare providers, insurers, and patients relying on cost-effective medications.
Impact on Indian pharma companies
Indian pharmaceutical companies, including Sun Pharma, Dr. Reddy’s Laboratories, Cipla, and Lupin, supply a significant share of the US generic and branded drug markets. The tariff may force firms to revise their business strategies, such as accelerating US-based production or reevaluating export volumes. Companies without existing or under-construction US plants may face higher costs, affecting profit margins and potentially slowing the supply of medicines.
Sun Pharma, India’s largest drugmaker by market capitalization, has several US subsidiaries but still imports branded products, impacting the Sun Pharma share price.The tariff could prompt the company to fast-track its US manufacturing plans or adjust pricing strategies to offset higher duties. Market analysts believe the Sun Pharma share price could remain volatile until there is clarity on its mitigation strategy.
Potential disruption in the healthcare system
Experts caution that the sudden implementation of a 100% tariff could disrupt the generic drug market in the US, where Indian companies play a key role in ensuring medicine affordability and availability. Reduced imports may limit access to some essential drugs, increasing costs for hospitals, pharmacies, and patients. The policy underscores the importance of local production capacity for maintaining national healthcare security and supply chain resilience.
The White House has not provided additional details on qualifying exemptions for US-based plants, creating uncertainty for foreign pharmaceutical firms. Investors and healthcare stakeholders are closely monitoring the situation, as changes could influence drug pricing, supply reliability, and patient access to treatment.
Market reaction
Following the announcement, Nifty Pharma members experienced declines ranging from 1.5% to 3%, while the broader Nifty 50 index fell 0.7% at market close. The Sun Pharma share price led the losses as traders reacted to the potential economic and operational implications of the tariff.
The move forms part of a broader US trade strategy to encourage domestic production across multiple sectors, including pharmaceuticals. While local manufacturing could strengthen national healthcare security over time, immediate impacts on global supply chains and drug affordability remain a concern for both businesses and patients.
Sun Pharma has not released a formal statement regarding the tariff. Investors are awaiting clarity on mitigation plans, including production expansion in the US, pricing adjustments, or alternate supply strategies.
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