Shares of top pharmaceutical companies declined sharply after a major development in the global pharma industry. US President Donald Trump has sent letters to 17 of the world’s biggest drug manufacturers, asking them to immediately lower prices of existing drugs in the United States. The letter also demands a guarantee that future medicines will be launched at prices comparable to those in other countries.
This move triggered a sell-off in pharma stocks globally, including in India.
Trump’s message comes with a 60-day ultimatum, warning that if companies do not comply, the US government will use “every tool in our arsenal” to stop what he called “abusive drug pricing” practices.
Market Impact in India
Indian pharma stocks saw immediate reaction in the stock markets.
Nifty Pharma index fell sharply during intraday trading.
Shares of large-cap Indian exporters, especially those with significant US exposure, were among the worst hit.
Investors were spooked as the pricing power in the world’s biggest drug market may now come under regulatory scrutiny.
Some of the top losers included:
Sun Pharma
Dr Reddy’s Laboratories
Lupin
Cipla
These companies generate a significant portion of their revenue from the US generics and formulations market. Any pricing control measures from the US could directly impact their margins.
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Why This Matters
The US has long been a lucrative market for Indian drugmakers, particularly due to the higher prices compared to other countries. However, if price parity is enforced globally, it could squeeze profit margins.
Trump’s strong-worded letter signals that the US is serious about healthcare reforms, particularly around pricing, a long-standing issue in American politics. This could force multinational and Indian pharma firms to rethink their pricing and expansion strategies in the US.
Quick Takeaway
Trump has issued a 60-day deadline to global drugmakers for price cuts.
Indian pharma stocks dropped as investors assess the impact on exports and margins.
US push for global price parity could affect India’s export-led pharma model.
Indian investors will closely track further developments and possible responses from the pharmaceutical companies in the coming weeks
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