Pharma stocks tumbled on Tuesday after the US President Donald Trump vowed to slash drug prices in the US by an unprecedented 1,400-1,500 per cent, (practically not possible below 100 per cent), a move that could render exports to the US uncompetitive.
Trump had earlier written to leading global drugmakers – including Johnson & Johnson, Pfizer, AstraZeneca, Bristol Myers, GSK, Merck, Novartis, Roche and Sanofi – demanding price cuts by September 29.
The remarks come against the backdrop of the administration’s hard stance on pharmaceutical pricing and its plan to impose steeper tariffs on medicines imported from India and other countries.
Pharma stocks drop up to 4%
Cohance Lifesciences tumbled 4.16 per cent to 219.95. Sun Pharmaceutical Industries Ltd tanked 2.41 per cent to Rs 1,616.80. Sai Life, Zydus Life and Pfizer declined 2-4 per cent. Aurobindo Pharma was down 1.49 per cent at Rs 1,051.45. Cipla slipped 1.14 per cent to Rs 1,582.85. Dr Reddys Laboratories Ltd fell 1.62 per cent to Rs 1,263.80. Lupin was down 2 per cent while Torrent Pharma also dropped 1 per cent.
The letters sought “most-favored-nation” (MFN) pricing for all Medicaid patients, effectively requiring companies to extend their lowest global rates to the US government. Trump has already set a September 29 deadline for pharmaceutical companies to significantly lower the drug prices.
India-US pharma trade
Pharmaceuticals are a major part — $11 billion or 12 per cent of India’s total merchandise export to the US in FY24. The US accounts for almost one third of India’s total pharmaceutical exports (FY24’s $31 billion). Overall, the US imports pharmaceutical products worth $180 billion annually. Imports from India are thus 6 per cent of the total pharmaceutical imports. Ireland (28 per cent) and Germany (21 per cent) are major sources of pharmaceutical imports into the US.
Pharmaceutical products are presently not subject to the reciprocal and penal tariffs announced by the US administration, effective from 07th August and 27th August 2025 respectively.
Pharma stock picks
For the Q1, US sales B&K’s coverage pharma companies declined 2 per cent to $2.5 billion as Lupin (up 24 per cent) and Torrent Pharma (up 16 per cent) outperformed, while others saw flattish to marginal decline in sales.
“Sun’s specialty portfolio grew by 17 per cent in to $ 311 million and it has launched Leqselvi in the US. US pharma supply chain a key monitorable in the near-term due to various factors such as impending tariffs, MFN regulations and API critical APIs/KSMs stocking (SAPIR) initiative,” the brokerage said.
The brokerage has Sun Pharma, Divi’s, Dr. Reddy’s, Cohance, Sanofi Consumer, GSK, Neuland, Caplin and Ipca as its top pharma picks.