The Indian pharmaceutical sector braced for potential impact Monday after US President Donald Trump signaled plans to dramatically reduce drug prices in the United States, a move that could reshape the global generics market.
The Nifty Pharma index closed at 20,949.70, showing mixed sentiments amid the developing narrative. Market movements reflected the uncertainty, with companies like Mankind Pharma experiencing a 3.73 per cent increase, while Granules India saw a 4.79 per cent rise. Auropharma gained 3.49 per cent, Dr. Reddy’s Laboratories climbed 3.26 per cent, and NatcoPharm advanced 3.51 per cent.
Conversely, some companies faced downward pressure. Sun Pharma declined 3.15 per cent, Ajanta Pharma dropped 2.28 per cent, Divislab fell 1.29 per cent, and Glenmark retreated 1.44 per cent. These fluctuations underscored the sector’s sensitivity to potential policy changes.
Trump’s anticipated announcement threatens to implement a “most favoured nation” policy that could potentially reduce US drug prices by 30-80 per cent. The proposed strategy aims to align US drug pricing with the lowest prices in other countries, a move that could significantly impact Indian generic drug manufacturers.
India’s pharmaceutical exports to the United States currently stand at approximately $9 billion, with generic drugs forming a substantial portion of this trade. Major players like Sun Pharma, Dr. Reddy’s, Glenmark, Lupin, and Zydus Life have substantial market presence in the US generics segment.
Industry experts point out nuanced challenges. The proposed pricing strategy faces complexities, including differential registration costs. In the US, a Generic Drug User Fee (GDUFA) for an Abbreviated New Drug Application can cost around $321,920, compared to approximately ₹15,000 in India.
The announcement comes amid broader geopolitical and trade considerations, including ongoing negotiations with China and potential pharmaceutical-specific tariff announcements expected in the coming days.
As markets digested the news, the Nifty Pharma index reflected the complex interplay of anticipation and uncertainty, closing with a marginal increase of 0.15 per cent for the day.
Published on May 12, 2025
