Drug major Sun Pharmaceutical Industries has signed a deal with the US government to lower prices of its innovative drugs in the US, in line with the lowest prices paid by other developed nations, under the most favoured nation (MFN) pricing framework. It has also committed to applying MFN pricing to future innovative medicine launches, the company said on Tuesday.
Under the agreement, Sun Pharma will also avoid tariffs on innovative pharmaceutical products for more than two years. The drugmaker signed the deal with the US government on 31 August, along with eight other mid-sized pharmaceutical companies, to extend MFN pricing for innovative drugs to state Medicaid programmes. Other terms of the agreements remain confidential.
Sun Pharma shares fell on Tuesday following the news, closing 2.9% lower at ₹1,927.20 apiece on the National Stock Exchange.
Sun Pharma and the eight other , including Teva Pharmaceuticals, BeOne Medicines and BridgeBio, will collectively invest at least $19.6 billion in US manufacturing in the near term, according to a White House fact sheet. They will also contribute active pharmaceutical ingredients (APIs) to the Strategic Active Pharmaceutical Ingredients Reserve (SAPIR) in the US.
Sun Pharma will contribute 71.4 tonnes of clindamycin and 6.75 tons of doxycycline, both antibiotics used to treat bacterial infections.
The agreement is part of US President Donald Trump’s MFN pricing drive to reduce drug costs for American patients. The US government has so far reached deals with 26 pharmaceutical manufacturers, including , AstraZeneca, Eli Lilly and, covering 89% of the branded drug market.
In April, the US imposed a 100% tariff on branded drugs, with companies signing such agreements exempted from the levy. The government also said in July that it would impose 100% tariffs on generics from 2028, a move that could affect Indian drugmakers more heavily and raise costs for US patients.
“The United States is a key area of investment and expansion for Sun Pharma across clinical development, sales and marketing, and both API and finished products manufacturing,” said Rick Ascroft, North America CEO, Sun Pharma, who represented the company at the White House. “We are proud to play our part in delivering the medicines that millions of American patients count on every day.”
initially built its US presence on a foundation of high-quality generics followed by an increasing emphasis on innovative and specialty medicines. The company ranks second by prescriptions in US dermatology and continues to expand across dermatology and immunology, cutaneous oncology, and ophthalmology.
Sun Pharma’s innovative product portfolio continues to outpace its US generics sales, with global innovative medicines sales growing 12.8% year-on-year to $351 million in the first quarter of FY27, accounting for 21.9% of total sales.
The US is Sun Pharma’s largest market for innovative medicines and a cornerstone of its long-term growth strategy, generating approximately 27% of the company’s global revenue, it said.