The US government has introduced tariffs of up to 100% on patented pharmaceuticals, significantly affecting Indian specialty drugmakers, particularly Sun Pharma, which generates over $1 billion in sales from the US. The tariffs stem from a Section 232 national security investigation, highlighting that 53% of patented drugs and 85% of active pharmaceutical ingredients are produced overseas. Notably, generics and biosimilars are exempt from these tariffs, allowing those sectors to remain unaffected. Analysts from Jefferies and Nomura have assessed the impact on Sun Pharma, estimating a potential 5% earnings decline if the company absorbs the tariffs. However, Jefferies analyst Alok Dalal believes that price adjustments could mitigate the impact. Additionally, seventeen large pharmaceutical companies have negotiated lower tariffs based on agreements with the US government, allowing them to pay either 0% or 20% tariffs until January 20, 2029. The tariffs are part of a broader strategy to address the trade deficit and national security concerns associated with offshore pharmaceutical manufacturing. Following the announcement, pharma stocks, including Piramal Pharma and IPCA Labs, experienced declines of up to 2%.