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ICICI Securities Report
Sun Pharmaceutical Industries Ltd. has entered into a Most Favoured Nation (MFN) pricing agreement with the US government, along with eight other pharmaceutical companies under which Sun will extend MFN pricing to state Medicaid programmes for existing and future launches, which according to the brokerage eliminates uncertainties on US tariffs.
Owing to this, the US government will delay a potential Section 232 tariff investigation on Sun's innovative pharmaceutical products for over two years.
The US accounts for ~70% of Sun's innovative sales ($1 billion in FY26), and four out of its eight key innovative brands are also sold in markets outside the US.
Sun Pharma's exposure to Medicaid programmes is likely less than 5%, in brokerage's opinion, which may limit the impact of direct price cuts.
While Sun Pharma's specialty portfolio is now safeguarded from tariffs, the same safeguard must be extended to Organon post-acquisition, adds the brokerage.
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