Jefferies is assessing the market implications of reports that the U.S. administration is preparing to impose new tariffs on some imported pharmaceutical goods as part of a Section 232 investigation. The proposed levies could reach 100% for affected products, according to those reports.
Analyst Alok Dalal at Jefferies outlined that the measures under consideration would apply to companies that have not secured an agreement with the White House. By contrast, shipments from countries that have reached negotiated trade terms with the United States would face limits set by those agreements.
The U.S. administration has not issued an official statement, and Jefferies emphasised that the proposals are not yet final and remain subject to change. The bank also noted that certain medicines or categories of disease could be carved out as exemptions under the eventual policy.
Jefferies reiterated its view that generic drugs are unlikely to be swept up in the proposed tariffs. "Our base case remains that tariffs on generics companies, including those from India, will remain exempt," Dalal wrote. The bank explained that placing tariffs on generics - which generally operate with very thin gross margins - risks creating supply disruptions that could lead to drug shortages.
Among Indian pharmaceutical firms, Jefferies singled out Sun Pharma as having the greatest exposure to the potential levies. The bank noted that innovative medicines make up roughly 20% of Sun Pharma's total revenue, and that several of the company's key products are manufactured in South Korea, the European Union or within the United States.
Because South Korea and the EU have reportedly negotiated pharmaceutical tariff terms with the United States at 15%, Jefferies concluded that "the max tariffs on Sun Pharma's innovative products would be capped at 15%."
The situation remains fluid: policy details, including scope and exemptions, could change before any formal announcement. Market participants and companies potentially affected will be monitoring for an official release from the administration and further clarification on which products and jurisdictions would be covered.