Indian pharma stocks fall as Trump moves to cut U.S. drug prices

A view of the Sun Pharma office. File
| Photo Credit: Reuters

Indian pharma stocks fell 1.6% on Monday (May 12, 2025), bucking broader market gains, after U.S. President Donald Trump said he would cut drug prices by 30%–80% to match other wealthy nations.

Mr. Trump said he would sign an executive order on Monday (May 12, 2025) to pursue “most favored nation” pricing.

The U.S. currently pays nearly three times more for many prescription drugs, though Mr. Trump offered no implementation details. Several Indian drugmakers earn a significant share of their revenue from North America by selling low-cost generic versions of newer drugs.

13 of 20 stocks on the pharma sub-index fell, led by Sun Pharma’s 4.6% drop, even as the Nifty 50 gained 2.5%; Zydus Life and Cipla also declined 0.7% each.

Divi’s Laboratories and Lupin fell 2% each, while Biocon lost nearly 3%.

“A price cut of prescription drugs by 50% or more would hurt the U.S. formulations market, more on the branded size due to immediate potential impact, while over the medium term it will also impact generics as it reduces the potential market size of new drugs,” said Shrikant Akolkar, an analyst at Nuvama Institutional Equities.

“Indian branded players like Sun Pharma, Biocon and Zydus Life may see an impact upon strict implementation,” Mr. Akolkar said.

The U.S. accounts for nearly a third of India’s pharma exports, which rose 16% to about $9 billion last fiscal year, according to government-backed trade body Pharmexcil.