The U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) is overseen by the Bureau of Global Health Security and Diplomacy (GHSD). Since its launch by the U.S. President George W. Bush in 2003, PEPFAR has supported lifesaving treatment for people living with AIDS and has saved 26 million lives and enabled 7.8 million babies to be born HIV-free as per PEPFAR Factsheet (2024, December 1). Through working with partners in 55 countries, the plan involved ending HIV/AIDS as a public health threat by 2030. Result is evident as there were 52% fewer new HIV infections in 2023 as compared to 2010 across PEPFAR-supported countries as UNAIDS estimates. During 2010-2023, AIDS-related deaths also decreased by 59% in PEPFAR-supported countries. The U.S. government has invested over $110 billion in the global HIV/AIDS response through PEPFAR.

Office of Global Policy and Strategy (OGPS) of the United States Food and Drug Administration (USFDA) serves as the agency lead for PEPFAR issues. Center for Drug Evaluation and Research (CDER) of the U.S. FDA reviews marketing applications for ARVs for the PEPFAR program through a Tentative Approval/Approval Program. CDER also maintains a PEPFAR database on the U.S. FDA website.

As a result of executive order dated January 20 from the U.S. President Donald Trump, the State Department halted virtually all U.S. foreign assistance for at least 90 days pending review of all programs. States spokesperson Tammy Bruce went on to say that ‘the US is no longer going to blindly dole out money with no return for the American people.” Immediate impact was on workers, employees and contractors at the global health bureau of USAID.

PEPFAR Database lists 264 applications, and 252 approved and tentatively approved products as on January 29, 2025. Approved or Tentatively Approved ANDAs stood at 134, Approved or Tentatively Approved NDAs stood at 70, withdrawn ANDAs stood at 19 whereas withdrawn NDAs stood at 72. Further, product categories list Single Dose (101), 2-Fixed Dose Combination (54), 3-Fixed Dose Combination (47), 4-Fixed Dose Combination (3) and Co-Packaged (4).

Indian pharmaceutical companies have significant presence in Anti-retroviral (ARV) segment. PEPFAR program application list is dominated by Indian companies such as Mylan Laboratories, Aurobindo Pharma with Supplier as Aurobindo Pharma USA, Inc., Cipla, Strides Pharma Science Limited, Hetero Labs Limited, Macleods Pharma, Micro Labs, Centaur Pharma, Laurus Labs, Emcure Pharma, and Lupin Limited. There are very few manufacturers from other countries such as Barr Laboratories (US), Zhejiang Huahai (China), Sushine Lake Pharma (China), Shanghai Desano (China), and Aizant Drug Research (South Korea and India).

A triple anti-retroviral therapy in HIV/AIDS at less than a dollar per day in Africa way back in 2001 is acknowledged as having contributed to bringing inclusiveness, affordability and accessibility to the centre of the HIV movement (AR 2023-24, p.3). Cipla’s initiative Cipla Global Access (‘CGA’) has extended the reach of affordable care for HIV/AIDS in addition to Malaria patients since 2001. In FY 2023-24, the company delivered lifesaving medicines to 64 countries. Exports Sales of South Africa, Sub-Saharan Africa and Cipla Global Access (SAGA) stood at Rs. 1,048.73 Crores or just 6.59 per cent out of total revenue of Rs. 15,924.20 Crores for FY 2023-24. In FY 2022-23 too, SAGA sales formed 6.27 per cent of total revenue of Rs. 14,690.14 Crore. So, standalone sales of only antiretrovirals are much less.

Aurobindo Pharma sells ARVs to over 125 countries by participating in global tenders floated by international organizations such as Global Fund, USAID/PEPFAR in addition to country-specific Ministry of Health.

Table 1: – ARV Formulations Revenue Trend of Aurobindo Pharma

(In Rs. crore)

Source: Integrated Annual Report (2024) of Aurobindo Pharma (p.140)

In FY24, Aurobindo Pharma had significant revenue from ARV formulations including the revenue from supply in both the Global Fund and PEPFAR allocation, e.g., in the Global Fund, Aurobindo Pharma was selected as a strategic supply partner for three years duration from January 2023 to December 2025. And in PEPFAR, Aurobindo Pharma was selected under both Lot-1 and Lot-2 allocation. Even with this, Antiretroviral drugs (ARVs) contributed just 3% to the total revenue mix for FY24 as per Integrated Annual Report of the company.

Just a week before implementation of Order that halted U.S. foreign assistance, Lupin received tentative approval from the United States Food and Drug Administration under the PEPFAR for its Abbreviated New Drug Application (ANDA) for the fixed-dose combination of Abacavir, Dolutegravir and Lamivudine Tablets for Oral Suspension, 60 mg/5 mg/30 mg, to market a generic equivalent of Triumeq Tablets for Oral Suspension of ViiV Healthcare Company. This suspension is a once-daily single-pill regimen and indicated for the treatment of HIV-1 infection in paediatric patients aged at least 3 months and weighing at least 6 kg.

Cipla and Aurobindo Pharma have reduced their reliance on ARVs through change in their product portfolio. Hence, impact of halting PEPFAR for the time being is not very high for these two companies. Laurus Labs has carved a niche in the antiretroviral domain and is world’s leading third-party API supplier for antiretrovirals. Satyanarayana Chava, founder and CEO of Laurus Labs on January 30, 2023, had stated that by FY 2025, the ARV business will be 1/3 of Laurus business. He anticipated that rest of the divisions will grow faster than ARVs. So, the company had diversification plans. On Q3 of FY 2023, ARV APIs formed 22 per cent of the company’s revenue, and ARV formulation formed about 10 per cent of the company’s revenue for nine months so 35 per cent of the revenue came from ARVs – both APIs and Formulations in nine months’ period. In this background only, the company issued clarification that the overall ARV market is $1.5 bn, which is 10 per cent of the total HIV financing budget annually. So, AIDS funding freeze will not have significant impact.

Impact of halt on PEPFAR was compounded with another Executive Order of January 20, 2025, from the White House regarding the US intention to withdraw from the World Health Organization (WHO). This was an important development for not only the US but the global healthcare as the USA contributes almost 18% of the WHO funding. The Order cited the reasons as the organization’s mishandling of the COVID-19 pandemic that arose out of Wuhan, China, and other global health crises, its failure to adopt urgently needed reforms, and its inability to demonstrate independence from the inappropriate political influence of WHO member states. The Order also stated that “the WHO continues to demand unfairly onerous payments from the US, far out of proportion with other countries’ assessed payments. China, with a population of 1.4 billion, has 300 per cent of the population of the US, yet contributes nearly 90 per cent less to the WHO”.

Given the fact that the U.S. spent $110 bn since 2003, so PEPFAR represented an opportunity for companies manufacturing generic drugs or providing API for formulations. Temporary halt as of now shows the reality of VUCA (volatility, uncertainty, complexity and ambiguity) world. The way DeepSeek jolted US reign as Tech stocks such as Nvidia, Oracle, Microsoft and Alphabet tumbled, stocks of listed Indian pharmaceutical companies which supplied ARVs to PEPFAR felt the impact of PEPFAR halt by Trump administration. This has lessons to offer on product portfolio too. Indian pharmaceutical companies such as Cipla, Aurobindo have reduced their dependence on ARVs through diversification of their product portfolio so these companies could minimize impact. Those who could not lower their dependence on ARVs, are likely to remain affected for the short run.

On January 25, 2025, the US President said that he may consider rejoining the WHO so the PEPFAR halt may also be temporary, but it has offered an important lesson to remain cautious while there is regime change in important markets, and portfolio re-balancing.

Dr. Anil Kumar Angrish- Associate Professor (Finance and Accounting), Department of Pharmaceutical Management, NIPER S.A,S, Nagar (Mohali), Punjab

Disclaimer: Views are personal and do not represent the views of the Institute.