'Pharma companies need to look beyond US market'

HYDERABAD: With the Trump administration's flip-flops on tariffs giving the Indian pharma industry a headache, experts feel it's time the sector looked at an 'America plus' strategy to reduce heavy dependence on US consumers and explore other markets to derisk business.

The US market dominates India's pharma exports, accounting for over 30% ($9 billion) of the total $28 billion in FY24, while the European Union stands as the second-largest market at around $4 billion. "The industry was relieved when Trump did not announce any tariff earlier and put a 90-day pause on tariffs after earlier stating his intention to impose tariffs on pharma, but the situation is still very dicey," said an industry source.

Many major Indian pharmaceutical companies , including Dr Reddy's, Sun Pharma, and Aurobindo, derive 40-45% of their revenues from the US market, making them particularly vulnerable to any adverse policy changes. Prescribing an 'America Plus' strategy for the Indian pharma sector, former Pharmaceuticals Export Promotion Council of India (Pharmexcil) Director General Ravi Uday Bhaskar said there are significant opportunities in the global generic drug market , which is projected to grow from $430 billion currently to $790 billion by 2030. He advocated market diversification for the Indian pharma sector while maintaining their US presence.

"We can't leave the US as 31% of our products go there, but we also need to look at expanding to other geographies. There is a huge opportunity we can tap in Latin America, Africa, and Asean," said Bhaskar. However, industry sources pointed to some challenges in finding alternative markets that could match the US market's scale.