2 weeks ago

Indian drugmakers shift from US generics to new markets

Indian drugmakers shift from US generics to new markets
Drugmakers shifting to non-US, non-generic markets to ward off margin squeeze · financialexpress.com

Indian companies make lots of medicines, including cheaper copies called generics, and sell many of them in America.

The American government, led by Donald Trump, wants medicines sold in America to be made in America.

So it put a big new tax, called a tariff, on some medicines made in other countries, and said it might do the same for generics in 2028.

That made selling to America harder and riskier for Indian medicine companies.

So companies like Sun Pharma, Lupin and Dr Reddy's decided to sell their medicines in more countries instead.

They are also making special, harder-to-make medicines that other companies don't copy as easily.

Their sales fell in America but grew in Europe, Russia, India and other regions.

One diabetes medicine called semaglutide had a quality problem, and Dr Reddy's had to stop supplying it for now.

The companies say it takes too long to move their factories to America, so they are looking for new customers around the world.

For now, they are hoping that new countries, new medicines and their home market in India will keep them strong.

Key facts

US tariff on branded drugs
100% import tariff, imposed in early April
Generic tariffs
Threatened to take effect August 2028
Dr Reddy's North America revenue
Down 35% YoY to Rs 2,205 crore (Q1FY27)
Sun Pharma US sales
Down 9.7% to $427 million
Sun Pharma innovative medicines
Up 12.8% to $351 million
Dr Reddy's emerging markets
Up 31% to Rs 1,830 crore
Dr Reddy's Russia/CIS growth
Up 24% to Rs 1,120 crore
Lupin's complex launches target
20 launches by 2028 plus 5 biosimilar filings

Quotes

Dr Reddy’s CEO Erez Israeli

CEO of Dr Reddy’s Laboratories

“"the first quarter earnings have positively surprised investors as India growth for most players has turned out to be strong and for some names it is at a level we haven’t seen in the last several years."”
financialexpress.com
“"the company has two years before tariffs take effect and that it’s not practical to move any facility in that timeframe."”
financialexpress.com

Sources

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