India's largest drug firm, Sun Pharma, has offered Most Favoured Nation (MFN) pricing to the US Medicaid programme under an agreement with the Trump administration, aiming to prioritize access to affordable medicines for American patients.

The deal provides a blueprint for domestic pharma companies seeking to expand their sales in the US, the world's largest market. Signed on August 31, the agreement recognizes Sun Pharma's investment in the US market and removes the threat of tariffs that had been looming over the industry.

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Under section 232, had announced

Under Section 232, the US had announced a 100% duty on innovative, patented drug imports, while generic medicines would face tariffs of 100% from August 2028 and 200% a year later. The agreement with the US government aims to address these concerns and ensure that American patients have access to affordable medicines.

Sun Pharma is the largest market for innovative medicines in the US, accounting for approximately 27% of its global revenue. The company's scrip closed over 1% lower at Rs 1,931 on BSE after the announcement.

Analysts say that sales of Sun Pharma's innovative drugs in the US are around $1 billion and are expected to increase to about $3 billion following the acquisition of Organon. Analysts like Vishal Manchanda of Systematix Group have praised the agreement, calling it a "politically astute decision" that removes the overhang of tariffs.

The development comes at an important time for Sun Pharma, which is shifting its US business beyond generics towards higher-value specialty and innovative medicines. The company has initially built its US presence on generics but now ranks second in the market.

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Sun Pharma joined eight pharma majors that signed agreements on August 31 at the White House to reduce prices on drugs that treat numerous costly, chronic, and rare diseases. The agreement includes a commitment to strengthen the US supply chain, with Sun Pharma contributing antibiotics to the SAPIR.

Further terms of the agreements remain confidential, but the deal is seen as a significant step forward for the company's long-term growth strategy in the US market.