Indian Pharma Firms Deepen US Investment in Specialty Drugs Amidst Generic Pressure

Indian pharmaceutical companies are strategically pivoting their US market approach, deepening investments in high-value specialty drugs, complex therapies, and local manufacturing to counter pricing pressures and intensifying competition in traditional generics, despite a recent dip in exports.

India's leading pharmaceutical (pharma) companies are deepening investments in the US market through specialty drugs, complex generics, respiratory products, and local manufacturing strategies, even as India's pharma exports to the country fell nearly 10 per cent in 2025-26 (FY26) amid pricing pressure, inventory correction, and intensifying competition in traditional generics.

Exports to the US stood at $9.47 billion in FY26, down 9.98 percent from the previous year, according to Pharmexcil data.

Vaccines emerged as the fastest-growing category, while Europe, Africa, and Latin America (LatAm) posted stronger growth than the US market.

Navigating US Market Challenges

Namit Joshi, chairman of Pharmexcil, said the decline in the US market was driven by a "high base effect, generic price erosion, inventory correction and product cycle timing" and was "not a structural concern".

"The US remains the largest market. The abbreviated new drug application pipeline remains intact and the opportunity in specialty generics and injectables remains strong," Joshi said while reviewing FY26 exports.

Far from scaling back, several Indian drugmakers are expanding their US pipelines, specialty portfolios, and manufacturing capabilities.

Companies are increasing investments in respiratory products, injectables, biosimilars, and rare disease therapies, while also pursuing differentiated regulatory pathways such as 505(b)(2) filings and selective local manufacturing to move closer to the American market and reduce dependence on commoditised oral generics.

Executives across companies highlighted larger pipelines, differentiated product filings and closer-to-market manufacturing capabilities as the next phase of US growth.

Leading Pharma Players' Strategies

At Sun Pharmaceutical Industries, that shift is already visible.

"Innovative medicines is now the largest of the businesses in the US when compared to generics," Richard Ashcroft, chief executive officer (CEO) for North America at Sun Pharma, said during the company's earnings call.

Sun's US formulations sales declined 1.1 per cent in fourth quarter (Q4) of FY26 due to additional competition in certain generic products.

However, its global Innovative Medicines sales rose 20.1 per cent during the quarter and 16.8 per cent for FY26, accounting for 22.2 per cent of quarterly sales.

"Our US innovative medicines business has surpassed $1 billion in revenues," Sun Pharma Managing Director (MD) Kirti Ganorkar said.

Founder and executive chairman Dilip Shanghvi added: "We continue to invest in building a research and development pipeline for both the global generics and the innovative medicines business."

Motilal Oswal said Sun's US generics business was affected by "base portfolio price erosion", while innovative medicines continued to drive growth.

The brokerage also highlighted higher US spending and a gradual recovery in generics.

Lupin, meanwhile, reported one of the strongest US performances among Indian peers, with its US business rising almost 40 per cent year-on-year to $1.3 billion in FY26.

Yet the company also acknowledged continuing pricing pressure and rising competition in the American generics market.

"Our base business also grew this year, supported by higher volumes that more than offset low-single-digit price erosion and additional generic competition in a few key products," CEO Vinita Gupta said during the company's earnings call.

Instead of expanding conventional generics, Lupin said it would focus on respiratory products, complex injectables, and biosimilars.

"We remain focused on doubling the share of complex products in our US business," Gupta said.

The company plans more than 50 US launches over the next three years, including 10 first-to-file opportunities, four biosimilars, and multiple 505(b)(2) products -- modified or improved versions of existing drugs that require limited new clinical data.

Localisation and Specialisation

Cipla is increasingly pursuing a "manufacture closer to market" strategy in the US, particularly for complex respiratory products.

The company said approval for generic Ventolin represented "the first commercial metered-dose inhaler product to be manufactured from our US facility".

During the earnings call, MD and Global CEO Achin Gupta described the approval as "an important strategic inflection point".

Cipla said its US business posted annual revenue of $780 million in FY26, supported by differentiated products and a stable base portfolio.

Industry analysts said the move reflects how Indian drugmakers are increasingly investing in localised and technologically complex manufacturing capabilities rather than relying solely on commodity generic exports from India.

Zydus Lifesciences is also sharpening its focus on specialised therapies in the US market.

Its North America formulations business grew 5.3 per cent sequentially in Q4FY26, supported by launches, base business growth, and specialty products.

"Sustained traction in the specialty and rare disease portfolio drove growth," the company said during its earnings call.

The company filed two new 505(b)(2) dossiers in April and launched another rare disease therapy in the US market.

At the same time, management acknowledged "increased competitive intensity in key products".

Future Outlook for Indian Pharma

Even as companies continue to diversify geographically towards Europe, Africa,

LatAm, and emerging markets, analysts say the US remains too large and profitable for Indian pharma firms to retreat from.

Instead, the strategy is evolving from scale-driven exports to specialised, higher-value and closer-to-market businesses.

"India pharma has moved beyond cost competitiveness," Joshi said.

"We are now competing on scale, reliability, science, and strategic relevance."