Sun Pharmaceutical Industries, India's largest drugmaker, has entered into an agreement with the US government to offer medicines at lower prices to American patients, while securing a delay in tariffs on its innovative products.
According to a PTI report, the Mumbai-based company has agreed to provide 'Most Favoured Nation' (MFN) pricing to state Medicaid programmes in the US. Under this arrangement, buyers can access the lowest available price for a medicine.
In a regulatory filing on Tuesday, Sun Pharma said the MFN pricing arrangement will also cover future innovative medicines launched by the company in the US.
Tariff relief for Sun Pharma
As part of the agreement, the US government has delayed the imposition of Section 232 tariffs on Sun Pharma's innovative products for more than two years. The arrangement takes into account the company's investments in the US.
Sun Pharma did not disclose further financial or commercial details of the agreement.
Rick Ascroft, CEO of Sun Pharma's North America operations, represented the company at the White House. He said the US remains an important market for the company's investments and expansion, covering clinical development, sales and marketing, as well as manufacturing of active pharmaceutical ingredients (API) and finished medicines.
US remains key market
The US has become Sun Pharma's biggest market for innovative medicines and accounts for about 27 per cent of its overall global revenue.
The company has been expanding its operations in the US and other Western markets. Earlier this year, Sun Pharma announced a definitive agreement to acquire Organon & Co. at an enterprise value of USD 11.75 billion.
Sun Pharma said it ranks second in the US dermatology market by prescriptions and is expanding into areas including immunology, cutaneous oncology and ophthalmology. Innovative medicines now account for around 22 per cent of the company's total sales, according to the company.
Shares of Sun Pharmaceutical Industries closed 0.60 per cent lower at Rs 1,944.25 on the BSE on Tuesday.
US pushes drug prices lower
The agreement is part of a broader US effort to bring down prescription medicine costs. The US government has signed pricing agreements with more than 20 pharmaceutical companies.
Reuters reported that medicine prices in the US are often nearly three times higher than those paid by patients in other developed countries, adding pressure on policymakers to secure lower prices.