How a key Sun Pharma drug may get impacted by the US MFN norms

Shares of Sun Pharmaceutical Industries Ltd

. remain in focus after the US Center for Medicare and Medicaid Services proposed mandatory pricing models to introduce most favoured nation pricing across Medicare Part B and Part D drugs.

The CMS has outlined two new frameworks. The Medicare Part B model, called GLOBE or Global Benchmark for Efficient Drug Pricing, proposes linking US drug reimbursement and rebate obligations to international reference prices.

Under this model, manufacturers would be required to pay rebates whenever US prices exceed global benchmarks. The Medicare Part D proposal is called GUARD, or Guarding US Medicare Against Rising Drug Costs.

Brokerage firm Macquarie said that Sun Pharma has the highest exposure to branded pharmaceuticals among its peers, making it more sensitive to such regulatory changes. Around 20% of the company's revenue comes from its innovative medicines portfolio, increasing the potential impact of international price benchmarking.

Macquarie said that Illumya, Sun Pharma's largest product, generates a meaningful portion of its revenue from Medicare Part B. This raises the likelihood that the drug could fall within the scope of the proposed GLOBE model.

Illumya’s US list price is over $17,000 per dose, compared with a UK NHS price of about $4,731, pointing to a wide pricing gap. If implemented, the GLOBE model could exert downward pressure on Illumya’s net pricing in the US market.

Despite these concerns, broader market reaction appears muted for now. The NYSE Pharma Index closed higher, suggesting limited immediate concern among investors over the proposed changes.