Here's what Jefferies says about potential 100% tariffs on certain medicines

Investing.com -- Jefferies is weighing the implications of potential 100% tariffs on certain pharmaceutical products, as reports recently stated that the Trump administration is preparing to announce fresh levies on drug imports under a Section 232 investigation.

Analyst Alok Dalal noted that the tariffs will reportedly be applied to companies that have not reached a deal with the White House, while imports from countries that have negotiated trade agreements would be capped at the terms of those deals.

U.S. President Donald Trump's administration has yet to issue an official release, and Jefferies noted that the plans are not yet final and could still change, with potential exemptions for certain medicines or disease categories.

Jefferies maintained that generic drugs are likely to escape the levies. "Our base case remains that tariffs on generics companies, including those from India, will remain exempt," Dalal wrote, adding that imposing tariffs on generics, which operate on thin gross margins, risks triggering drug shortages through supply chain disruptions.

Among Indian pharmaceutical companies, Jefferies identified Sun Pharma as the most exposed.

Innovative medicines account for roughly 20% of Sun Pharma's total revenue, with key products manufactured in South Korea, the European Union or within the U.S.

Both South Korea and the EU have negotiated pharmaceutical tariffs at 15% with the U.S., leading Jefferies to conclude that "the max tariffs on Sun Pharma's innovative products would be capped at 15%."

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