Sun Pharmaceutical Industries has entered into an agreement with the US government to provide most favoured nation (MFN) drug pricing to state Medicaid programmes and future innovative medicine launches.
In return, the company will receive a delay of more than two years on possible US tariffs affecting innovative pharmaceutical products.
The agreement was announced during a White House signing ceremony attended by representatives of several pharmaceutical companies.
Sun Pharma said the arrangement recognises its investment in the US healthcare market and postpones potential Section 232 tariffs on imported innovative medicines.
Balances pricing commitments and tariff relief
Under MFN pricing, pharmaceutical companies agree to offer medicines to US government health programmes at prices comparable to the lowest rates available in other developed markets. The financial impact of the agreement remains unclear as several details have not been disclosed.
Sun Pharma’s North America CEO Rick Ascroft said the company remains committed to supplying medicines relied upon by millions of American patients.
The agreement comes as US President Donald Trump pushes measures aimed at reducing prescription drug costs while encouraging pharmaceutical companies to expand manufacturing and investment within the country. The administration has threatened tariffs of up to 100% on imported branded medicines and active pharmaceutical ingredients.
US market remains crucial
The US is Sun Pharma’s largest market, contributing around 27% of its global revenue. Over the years, the company has moved beyond its traditional generic drug business and expanded into specialty medicines across areas such as dermatology, immunology, ophthalmology and oncology.
The biggest advantage of the agreement for Sun Pharma is the postponement of possible Section 232 tariffs, which could have increased costs and disrupted pharmaceutical supply chains.
Section 232 allows the US government to impose tariffs on imports considered significant from a national security perspective. The pharmaceutical sector has been closely monitoring the policy due to concerns over its impact on medicine prices and manufacturing costs.
For Sun Pharma, the tariff relief could outweigh the potential impact of extending MFN pricing, particularly as the company continues to strengthen its presence in the US market and expand its innovative medicine portfolio.
