Baricitinib

New Delhi: What distinguishes India’s largest drug manufacturer, Sun Pharma , among its domestic peers might work against the company's future growth ambitions, on account of a new pricing model announced by the US President earlier this month. Speaking at a webinar hosted by ET Pharma over the new Most-Favoured Nation (MFN) pricing model, a market analyst voiced that while the Indian Pharma industry stands immune with generics, Sun Pharma, which has made specialty novel drugs as its key focus, might encounter some bumps on its future ambition track. “The proposed model is meant to play on the price differentiation of drugs and if it gets implemented it is going to be disruptive for the innovator pharma industry and cutting down prices by up to 50-60 per cent might push innovators into losses," said Vishal Mabchanda, a pharma analyst at Systematix Group. “Among the Indian companies, Sun Pharma that have an innovative portfolio, stands to get impacted," he added. According to an price differential analysis undertaken by the US department of Health and Human Services, using 2022 data, “US prices were closer to those in other countries—at 173 and 213 percent of international prices—when applying the overall and retail-dispensed, and for only brand-name drugs, US prices stands 308 per cent of prices in other countries.” However, at Sun Pharma's last earnings call for Q4 FY25, the company Chairman and MD, Dilip Shanghvi said that, “currently the order is at a voluntarily level and we have wait for greater clarity on this.” At the webinar, Nishith Sanghvi, Director, Corporates at India Ratings, also underlined that, the channels which procure drugs in US plays a major role in deciding the prices and notably, while announcing the order US President Donald Trump specifically voiced that the administration wants to remove the middle-men from the distribution chains. “The Secretary of Health and Human Services will establish a mechanism through which American patients can buy their drugs directly from manufacturers who sell to Americans at a “Most-Favored-Nation” price, bypassing middlemen,” the Factsheet on the order issued from the Whitehouse suggests. “When the order was announced, the market reaction reflected that the proposed order is highly unlikely to be implemented in its initial proposed format and it will likely be in a more diluted form,” Manchanda noted. Besides this, the chance of a legal challenge is always there on the horizon as seen in the past during Trump's first term-though the order was restricted to the government-funded Medicare program. Following the Ranbaxy fiasco, what is often described as Sun Pharma’s 'second stint' saw the Indian drugmaker shift its focus from the traditional generics ANDA pathway to novel innovations in specialty therapeutic segments. Over the last few years, driven by in-licensing agreements and in-house capabilities, the company has established a solid foundation in this segment. In the latest concluded quarter ended March this year, while the company reported a 19 per cent year-on-year (YoY) decline in its net profit , the global specialty sales went up by 8.6 per cent to $295 million (around ₹2,500 crore)--accounting for 19.9 per cent of the total quarterly sales. Moreover, for the full fiscal period, the specialty portfolio accounted for 19.7 per cent of the total global sales and generated $1,216 million (around ₹10,330 crore), up by 17.1 per cent against the previous fiscal. Expanding its specialty portfolio, the drugmaker is looking to launch two of its approved pipeline candidates--Leqselvi and Unloxcyt---in the near future. Leqselvi , a JAK 1/2 inhibitor was approved by the FDA in July 2024 for treatment of adults with severe alopecia areata (a type of hair loss). The company's plans were mired by a court ruling which blocked the drug launch in November 2024, but in April this year the US Court of Appeals for the Federal Circuit lifted the preliminary injunction and cleared its market entry. According to experts, “Sun Pharma’s Leqselvi higher dose of 8 mg twice daily, positions it in a stronger position as the higher dose will have a slightly better efficacy in comparison to Eli Lilly’s Olumiant which is taken at 2mg or 4mg per day for severe alopecia areata treatment.” A market assessment report published by GlobalData expects that, “total sales of Leqselvi is expected to reach $698.3 million (around ₹5,930 crore) in the US by 2033, accounting for approximately 35 per cent of the anticipated $2 billion (₹1,7000 crore) market for alopecia areata therapies in the country. Besides this, in March this year, the Indian drugmaker acquired a US-based immunotherapy and targeted oncology company, Checkpoint Therapeutics , with an upfront payment of up to $355 million (around ₹3000 crore). Unloxcyt (cosibelimab-ipdl) has received approval from the USFDA for the treatment of adults with metastatic cutaneous squamous cell carcinoma (cSCC) or locally advanced cSCC who are not candidates for curative surgery or curative radiation. Industry experts suggest that in the US, Onco-derma drugs have the highest profit margin among all therapeutic segments. Announcing, the company's Q4 FY25 results, Dilip Shanghvi said that, "The near-term pipeline in Global Specialty is promising, with products such as Leqselvi and Unloxcyt—the latter through our recently announced Checkpoint acquisition—offering significant improvements in patient care and we look forward to specialty drugs becoming an increasingly important part of our business." For FY25, the company's total revenue of ₹52,578 crore and the R&D spent (largely aligned for specialty projects) stands at ₹3,248 crore–accounting for nearly 6.2 per cent of total sales. While the administration is yet to convey the price targets, the recent developments reflect that with a majority in both houses and the commendation on the executive machinery, there is no holding back on the part of US. For the Indian drugmaker, identified with the unpredictable strategy of turning niche gaps into million-dollar bets, the road ahead may soon be shaped by equally unconventional policies and mounting unpredictability. By Abhijeet Singh ,