Sun Pharma has signed an agreement with the US government to provide medicines for American patients at affordable rates. In return, the company will get over two years of relief from tariffs covered under Section 232 regime for its innovative drugs portfolio.
Sun is one of nine companies that have signed new agreements with the US government to offer MFN pricing to state Medicaid programmes. Previously, the US had signed similar pacts with 17 global pharma giants such as Pfizer, AstraZeneca, Eli Lilly, Novo Nordisk, Novartis, Sanofi, Merck, among others.
The US remains Sun Pharma’s second-largest market after India, contributing 26.6% of consolidated sales in the first quarter of FY27. The dependence is significant, although it has moderated somewhat as the company has expanded its presence in other markets.
“The agreement recognises Sun Pharma’s investment in the US market by delaying Section 232 tariffs on innovative pharmaceutical products for over two years. Further terms of the agreements remain confidential,” the company said in a statement.
The agreement will also be applicable on Sun’s future innovative/specialty drug launches in the US. Experts said that the delay gives Sun Pharma greater cost certainty for its high-margin specialty business which accounts for 55-60% of its US sales. The pact also reduce near-term tariff risk for Sun’s specialty portfolio, which includes medicines such as Ilumya, Cequa and Winlevi.
“Without the MFN agreement, Sun Pharma could have faced Section 232 tariffs on its innovative drugs and covered pharmaceutical ingredients imported into the US,” said pharma analyst at a brokerage.
To be sure, Section 232 tariffs are already in force. The US imposed 100% tariff on patented medicines and associated ingredients for certain companies from July 31, 2026, and for other companies from September 29, 2026. The framework also provides for zero tariff until January 2029 for eligible companies that enter into MFN pricing agreements and meet the specified conditions. Section 232 is aimed at shifting the pharma manufacturing to the US by making imports costlier.
“The US is a key area of investment and expansion for Sun Pharma across clinical development, sales and marketing, and both API (active pharmaceutical ingredient) and finished products manufacturing,” said Rick Ascroft, North America CEO at Sun Pharma.
Indian drugmakers are also staring at the prospect of steep US tariffs on generic medicines, with US president Donald Trump having announced a 100% tariff from August 2028 and 200% from August 2029. Agreements such as Sun Pharma’s could give companies a new way to limit the impact of these tariffs if similar MFN deals offer preferential treatment in return for pricing or investment commitments.