During the ET NOW Global Business Summit 2025, held at the Hotel Taj Palace, New Delhi, on 15-16 February 2025, Dilip Shanghvi, the Managing Director of Sun Pharmaceutical Industries, shared his perspectives on the pharmaceutical industry’s future, specifically in relation to US tariffs. Shanghvi’s commentary provided key insights into how Indian pharmaceutical companies, especially Sun Pharma, might respond to the changing global business environment, including new economic policies such as the US’s proposed tariffs on pharmaceutical imports.

Shanghvi began by outlining Sun Pharma’s diversified business strategy, emphasizing the company’s robust presence in both emerging and developed markets. He stated that Sun Pharma’s business is divided into several key segments, each contributing to the company’s overall growth and sustainability. The company’s branded generic medicine business in India accounts for around 50% of its total business, while the US market contributes another 25%. The remainder of Sun Pharma’s operations is dedicated to specialty products and Active Pharmaceutical Ingredients (APIs).

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In the face of rising global economic uncertainties, Shanghvi expressed his confidence in the company’s resilience and long-term growth. He explained that the company expected each segment to grow faster than the industry average, with the specialty business emerging as a major growth driver in the years to come. This strategic focus on specialty products, along with the company’s ongoing investments in research and development, is positioning Sun Pharma to maintain its competitive edge, regardless of broader market challenges.

Addressing US Tariff Concerns: Sun Pharma’s Outlook

One of the central topics discussed during the summit was the potential impact of US tariffs on Indian pharmaceutical companies. In particular, US President Donald Trump’s proposal to impose a 25% tariff on pharmaceutical imports raised concerns in the global pharmaceutical market, including among major players like Sun Pharma.

Shanghvi acknowledged the uncertainty surrounding these tariffs, stressing the importance of waiting for further clarity on the US policy. He pointed out that Sun Pharma has a substantial share of its revenue tied to the US market, which makes the issue of tariffs particularly significant for the company. However, despite the looming uncertainty, Shanghvi remained optimistic, indicating that Sun Pharma’s robust supply of essential medications to the US market might make generic pharmaceutical products exempt from such tariffs.

“I believe that pharma generic products will be spared from these tariffs,” Shanghvi remarked, expressing a sense of cautious optimism regarding the potential outcome of the trade dispute.

Mitigating the Impact of Tariffs on the Industry

Even in the case that tariffs are implemented, Shanghvi outlined a strategy to mitigate any potential negative impacts. He suggested that pharmaceutical companies, including Sun Pharma, might be able to pass on the increased costs of tariffs to customers, minimizing the financial burden on the companies themselves. This could be achieved by adjusting the pricing of imported drugs, which would, in turn, likely affect the end consumers in the US.

Shanghvi also highlighted that, in his view, the tariffs would not have a significant long-term negative impact on the pharmaceutical industry as a whole. He attributed this optimism to India’s strong competitive advantage in the pharmaceutical sector. Indian pharmaceutical companies, he noted, have established themselves as leaders in the global market, particularly in the production of affordable generic medicines, which remain in high demand across a range of therapeutic areas.

India’s pharmaceutical industry, which has grown exponentially over the past few decades, is particularly well-placed to weather such policy challenges. Indian companies, such as Sun Pharma, produce a substantial portion of the world’s generic medications, a sector that accounts for billions of dollars in savings for healthcare systems globally. This competitive edge, based on low production costs and high manufacturing quality, positions Indian pharma to continue thriving even in the face of adverse global trade policies.

Sun Pharma’s Diversified Global Presence

Sun Pharma has long been a prominent player in the global pharmaceutical industry. As the largest pharmaceutical company in India, it operates in more than 100 countries, with an extensive portfolio that spans across specialty medicines, branded generics, generics, and APIs. Its global footprint, coupled with its strong presence in key markets such as the US, Europe, and emerging economies, provides a buffer against fluctuations in any single market.

Shanghvi also emphasized that the company’s diversification strategy has allowed Sun Pharma to remain flexible and adaptable to changing market dynamics. By focusing on multiple segments and regions, the company has been able to reduce its reliance on any single market or product, minimizing risk and ensuring continued profitability.

With its increasing emphasis on specialty medicines, Sun Pharma aims to expand its high-value offerings that cater to unmet medical needs. This is part of the company’s long-term strategy to move away from traditional generics and toward more complex, higher-margin therapeutic areas, such as oncology, dermatology, and ophthalmology. By doing so, Sun Pharma hopes to not only mitigate the potential impact of external factors, such as tariffs, but also establish itself as a leader in the evolving pharmaceutical landscape.

The Role of Specialty Drugs in Sun Pharma’s Future

Shanghvi’s comments on the growing importance of specialty drugs for Sun Pharma were particularly noteworthy. He explained that specialty drugs, which are typically used to treat complex or chronic diseases, are becoming a much larger part of the company’s portfolio. This shift toward specialty products is expected to significantly boost Sun Pharma’s growth in the coming years.

Sun Pharma’s growing focus on specialty drugs reflects broader trends in the pharmaceutical industry, where innovation is moving away from traditional generics toward more targeted, high-cost therapies. This transition is expected to contribute to the company’s long-term success, despite potential challenges posed by external factors like tariffs.

In the face of tariff threats, Shanghvi expressed confidence in Sun Pharma’s ability to continue adapting and growing. He emphasized the company’s dedication to R&D and innovation, both of which are critical to its success in the specialty drug market. Sun Pharma’s growing pipeline of specialty products in areas like oncology and neurology positions it well for future growth, regardless of fluctuations in the generic drug market.

Strategic Considerations for the Pharmaceutical Industry

The discussion at the Global Business Summit 2025 reflected broader concerns within the pharmaceutical industry regarding international trade policies and their potential impact on global supply chains. The US is one of the largest markets for pharmaceutical products, and any shifts in trade policy could have far-reaching consequences for companies that rely heavily on exports to the country.

However, Shanghvi’s measured approach highlights the resilience of Sun Pharma and other Indian pharmaceutical companies. While tariffs could create temporary challenges, India’s competitive advantage in the pharmaceutical sector, driven by cost efficiencies and a large talent pool, ensures that Indian companies remain a vital part of the global supply chain.

Furthermore, the rise of specialty drugs presents new opportunities for companies like Sun Pharma, as they move beyond the traditional generics market and into high-value therapeutic areas. This strategic shift is likely to help Sun Pharma navigate the changing landscape of international trade while continuing to grow and thrive in global markets.

As the US tariff proposal looms large, Sun Pharma and other Indian pharmaceutical companies are navigating a complex and rapidly changing global business environment. While the potential impact of tariffs remains uncertain, Sun Pharma’s diversified operations, strong global presence, and strategic focus on specialty drugs provide a solid foundation for the company’s continued success.

Shanghvi’s remarks at the Global Business Summit 2025 emphasize that, while challenges are inevitable, Sun Pharma is well-positioned to weather these obstacles and continue delivering high-quality medicines to patients around the world. The company’s long-term growth strategy, which focuses on innovation, market diversification, and resilience in the face of policy shifts, ensures that Sun Pharma remains a key player in the global pharmaceutical industry.