Pharma stocks under pressure: Sun Pharma cracks 5%, Nifty Pharma down 2% after Trump’s big blow on US drug pricing

Indian pharma stocks tanked in early trade on Monday, May 12, after US President Donald Trump announced an executive order to slash prescription drug prices in the United States by 30 to 80 per cent. This sent shockwaves across the pharmaceutical sector, especially among Indian companies heavily exposed to the US generics market.

At 9:30 AM, the NIFTY Pharma index was down 1.98 per cent to 20,653.80, with leading pharmaceutical names like Sun Pharma, Lupin, Dr Reddy’s, and Aurobindo Pharma witnessing sharp declines.

Sun Pharma leads pharma selloff

Sun Pharma is the worst-hit, plunging over 5 per cent in early trade. The company has significant exposure to the US generics and dermatology markets through its subsidiary Taro Pharma, making it highly vulnerable to any pricing reforms in the US.

Lupin also saw losses in early trade of over 2.5 per cent. The US remains Lupin’s largest market, contributing 36.2 per cent to its total revenue for the first nine months of FY24. Other stocks include Aurobindo Pharma (-2.12%), Divi’s Labs (-1.17%), and Glenmark Pharma (-1%).

Trump’s executive order shocks markets

On his Truth Social platform, Trump wrote:“Prescription drug prices in the US are five to ten times higher than other nations. I’m signing an executive order to cut them by 30 to 80 per cent.”

He added the ‘Most Favoured Nation’ policy would ensure the US pays the same price as the country with the lowest price globally—raising serious implications for Indian pharma exports.

Pharma outlook: Weakness likely to continue

The Nifty Pharma index has already declined over 10 per cent so far in 2025, and today’s fall extends the pain. While some stocks like Cipla and SPARC manages to stay marginally in the green, overall sentiment remains bearish as of yet. 

Analysts expect continued volatility in pharma counters as more details on the US pricing policy emerge. Indian drugmakers will likely face pressure on margins, especially those with high dependence on the US generics market.