Biocon is not rushing to react to proposed US tariffs on generic drugs in its largest market as it sees the move as a negotiation tactic rather than a real threat, executive chairperson Kiran Mazumdar-Shaw told Mint in an interview, noting that tariffs would undermine Washington’s efforts to lower healthcare costs. The biopharmaceutical giant, which is among the world’s top biosimilar manufacturers, remains in wait-and-watch mode, while exploring US manufacturing partnerships if required, Shaw said.
The company has already expanded manufacturing capabilities in the US and is open to looking at other opportunities, she added. “There are certain products that we are already looking at making in the US. We announced that we are looking at a partnership in insulins for fill and finish and we are looking at some other opportunities that we have of bringing biologics manufacturing in the US through Syngene,” she said. “I think we will wait and watch, but we don't believe that this is going to be carried through.”
Inflation risk
The US remains an important market for both generics and biosimilars as it continues to rely heavily on them for affordable healthcare. Generics and biosimilars account for roughly 90% of prescriptions in the US but only around 10% of drug spending by value.
Imposing steep tariffs on these medicines would increase healthcare inflation in the US, making it difficult for policymakers to meet their objective of lowering drug costs, Shaw said, describing the tariff proposal as "more like a negotiating threat and less of a real threat”.
While Biocon already has a manufacturing presence in the US, she said companies need not necessarily build wholly owned plants to increase local production. "You can partner, you can outsource… what is the right balance is what we need to look at.”
In July, US President Donald Trump proposed a phased tariff plan for imported generic drugs, starting at 100% in 2028 and rising to 200% the year after. The plan is widely believed to be unviable, given the short timeline and the country’s dependence on generics. It is also unclear if biosimilars are included in the plan. While generics are exact copies of chemical drugs, biosimilars are highly similar versions of innovative biologic drugs.
Biocon’s business spans biosimilars, generics and research services under Syngene International. The company merged its biosimilars subsidiary Biocon Biologics with the parent company last year, which has “brought in a lot of synergies and allowed us to strengthen our balance sheet”, Shaw said.
Focus on profitable growth
The company is now focused on profitable growth and deleveraging, with its debt-equity ratio improving to a comfortable level, she added. Its net-debt-to-equity ratio stood at 2.7 at the end of FY26. While Biocon intends to reduce leverage further over time, Shaw said the current balance sheet is strong enough to support future growth.
At a press conference on Thursday, Biocon CEO and managing director Shreehas Tambe told reporters that the firm was planning to sustain profitability through various measures such as product mix, improved operating leverage, and better cost efficiencies.
The company's biosimilars business saw strong growth in Q1FY27, expanding 16% year-on-year and making up 83% of its revenue for the quarter. The firm expects the second half of the fiscal year to be stronger as it scales up recently launched biosimilars in the US market, Tambe said.
The firm posted its financial results for the June quarter on Wednesday, with revenue growing 10% to ₹4,336 crore and net profit jumping 245% to ₹145 crore on strong biosimilars growth. On Thursday, Biocon’s shares closed 2.67% higher at ₹436.55 on the NSE.