Whalesbook
US Policy Focus: Branded Drugs Targeted
US drug pricing policies are unlikely to significantly affect Indian pharmaceutical manufacturers, with the focus centering on branded and patented medicines. Vishal Manchanda, Pharma Analyst at Systematix Group, noted that a key uncertainty remains whether such tariffs will be implemented at all.
Sun Pharma's Role Amidst New Pricing Rules
Should tariffs be introduced, their impact would likely be confined to companies with substantial exposure to branded drugs. Sun Pharmaceutical Industries, a major player in the US specialty segment, stands out. Manchanda suggested that Sun Pharma, like its global peers, could mitigate tariff risks by entering into pricing agreements.
Why Generics Remain Safe
Tariffs on generic drugs are considered unlikely by Manchanda, as these essential medicines form a critical part of the US healthcare supply chain. Companies that have already secured agreements with the US have managed to avoid tariff risks while maintaining operational benefits.
Analyst's Positive View on Sun Pharma
Manchanda maintains a positive outlook on Sun Pharma, highlighting its reduced reliance on US generics and a greater share of branded products. This strategic mix is expected to support its growth relative to peers, with a downside scenario projecting a contained financial impact of approximately 2-3% on EBITDA.