(Reuters) -Indian pharma stocks fell 1.6% on Monday, bucking broader market gains, after U.S. President Trump said he would cut drug prices by 30%–80% to match other wealthy nations.
Trump said he would sign an executive order on Monday to pursue “most favored nation” pricing.
The U.S. currently pays nearly three times more for many prescription drugs, though 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.
Thirteen 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,” 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.
(Reporting by Kashish Tandon in Bengaluru; Editing by Nivedita Bhattacharjee and Mrigank Dhaniwala)
