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Pharma Stocks Under Pressure: Nifty Pharma Index Sinks 2% as Trump Targets Drug Prices, Sun Pharma Plunges 5%

Updated: May 12, 2025 09:56

Image Source: Outlook Money
Pharma Stocks Under Pressure: Nifty Pharma Index Sinks 2% as Trump Targets Drug Prices, Sun Pharma Plunges 5%
Indian pharmaceutical stocks took a sharp hit on Monday after US President Donald Trump announced sweeping measures to slash prescription drug prices, rattling investor confidence and triggering a broad selloff across the sector. The Nifty Pharma Index dropped 2% in early trade, with Sun Pharma leading the declines, tumbling 5% to become the day’s biggest loser.
 
Key Highlights:
  • Trump’s Executive Order Shakes Sector: President Trump declared via Truth Social that he will sign an executive order to cut US prescription drug prices by 30–80%, aiming to align American prices with those paid by the lowest-paying nation globally. The move is set to take immediate effect and is expected to impact both branded and generic drugs, raising concerns about the profitability of Indian pharma exports to the US.
  • Sun Pharma, Major Exporters Slide: Sun Pharma, which generates over 30% of its revenue from the US, plunged 5.4%, leading the sector’s losses. Other major exporters like Cipla, Lupin, Aurobindo Pharma, and Glenmark also saw declines of 1–3% as the market digested the news.
  • Tariff Fears Add to Woes: The sector is also facing uncertainty over potential new US tariffs on drug imports. Trump has hinted at “never seen before” tariff levels, which could further squeeze margins for Indian drugmakers heavily reliant on the US market.
  • Domestic Impact: The selloff comes despite a rally in the broader Nifty 50 index, highlighting the sector-specific nature of the risk. Eight of the 20 stocks in the Nifty Pharma sub-index were in the red, and analysts warn of continued volatility as the policy details emerge.
  • Broader Implications: With nearly one-third of Indian pharma exports headed to the US, any aggressive price or tariff action could dent earnings and force companies to rethink their global strategies.
As the industry awaits clarity on the full scope of Trump’s executive order and potential tariffs, Indian pharma stocks remain in the spotlight for heightened risk and volatility.
 
Sources: CNBC-TV18, Reuters, Moneycontrol, Economic Times, Outlook Money

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