Nifty Pharma Drops Nearly 2% As Trump’s Generic Drug Tariff Plan Weighs On Pharma Share Prices

The Nifty Pharma index remained under pressure in Wednesday’s trade after U.S. President Donald Trump announced a phased tariff plan for imported generic medicines, triggering broad-based selling in pharmaceutical stocks with significant exposure to the U.S. market.

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By 10:40 am IST, the Nifty Pharma index had fallen 1.51% to 25,699.45. The weakness extended to the broader market, with the Sensex declining 675 points, or 0.9%, to 76,795, while the Nifty 50 dropped 192 points, or 0.8%, to 23,995. India VIX gained 4.6%, and Nifty Realty emerged as the weakest sectoral index, down 2.19%.

Pharma Share Prices Decline Across the Board

Selling was widespread across the sector, with Lupin share price falling nearly 4%. Piramal Pharma share price, Aurobindo Pharma share price and Gland Pharma share price each declined more than 3%.

Other major stocks also traded in negative territory. Cipla share price, Dr Reddy’s Laboratories share price, Sun Pharma share price, Zydus Lifesciences share price, Ajanta Pharma share price, Glenmark Pharma share price, IPCA Laboratories share price, Alkem Laboratories share price and Mankind Pharma share price all remained under pressure during the session.

Among Nifty 50 constituents, Cipla share price fell around 1.8%, while Dr Reddy’s Laboratories share price declined about 1.6%. Sun Pharma share price was also lower by approximately 0.9%.

U.S. Tariff Roadmap Triggers Investor Reaction

Trump announced a phased tariff structure for imported generic medicines on Tuesday. Under the proposal, generic drugs entering the U.S. will continue to face zero tariffs until August 2028. Thereafter, imports will attract a 100% tariff for one year, followed by a 200% tariff from August 2029.

In a post on Truth Social, Trump said the policy is intended to encourage pharmaceutical manufacturers to establish production facilities in the U.S. He added that companies choosing not to manufacture locally within the prescribed timeline would face penalties. The proposed policy does not apply to patented, branded or innovative medicines.

Indian Drugmakers Have Significant U.S. Presence

The announcement has drawn attention because Indian pharmaceutical companies account for a substantial share of generic medicine supplies to the U.S. Companies including Sun Pharma share price, Dr Reddy’s Laboratories share price, Cipla share price, Lupin share price, Aurobindo Pharma share price and Zydus Lifesciences share price are closely linked to the U.S. generics market.

Speaking to CNBC-TV18, Granules India Executive Director Priyanka Chigurupati said manufacturing generic medicines in the U.S. would cost 25-30% more than producing them in India. She added that the proposed transition period would be challenging given the complexity of generic drug manufacturing. Chigurupati also said Granules India already operates manufacturing, packaging and logistics facilities in the U.S., but estimated that medicine prices would need to rise by 50-70% to make large-scale generic production commercially viable there.