Pharma Stocks Plunge: Sun Pharma, Aurobindo, Cipla, Lupin Fall as Trump Cracks Down on Global Drug Prices

Market Performance

Pharma stocks witnessed a sharp sell-off on Friday, triggered by new developments from the United States that rattled investor sentiment.

• The Nifty Pharma index fell over 2.8%, marking its third consecutive day of decline.
• Sun Pharma led the fall with a 4% drop, becoming the worst performer on the Nifty 50 index.
• Aurobindo Pharma, Gland Pharma, Cipla, Granules India, and Lupin also saw declines of over 3% each.

Main News

The broader decline came after US President Donald Trump issued letters to 17 global pharmaceutical giants, calling for an immediate reduction in drug prices in the American market.

The letters demand that pharmaceutical companies align US drug prices with the rates offered in other developed nations. The communication also includes a 60-day ultimatum to comply or face tough regulatory actions.

Companies receiving the letter include Pfizer, Eli Lilly, Novo Nordisk, and several others. This aggressive move aims to implement Most Favored Nation (MFN) pricing policies within two months.

Company Details

Sun Pharma

• Revenue Exposure: ~20% of total revenue comes from US sales.
• Stock Impact: Dropped 4%, making it the biggest loser in Nifty 50.
• The fall also follows recent quarterly earnings, intensifying bearish sentiment.

Aurobindo Pharma, Gland Pharma, Cipla, Granules India, and Lupin

• All recorded declines of over 3%.
• The price correction reflects market concerns over potential revenue and margin pressure from the US market, which remains a key geography for these firms.

US Policy Pressure

In an official briefing, White House Press Secretary Karoline Leavitt highlighted that US consumers pay over 3x more for branded drugs compared to other developed nations.

President Trump’s letter emphasizes:

• Equal pricing for existing and future drugs across countries.
• Direct-to-patient pricing parity with what’s offered to insurers.
• A warning that the US would use “every tool in our arsenal” if companies fail to comply.

Tariff Concerns on the Horizon

Adding to the overhang, US Commerce Secretary Howard Lutnick recently stated that a new pharmaceutical tariff policy may be unveiled soon.

Key quote:

“If you’re not building your plant in America where we pay for pharmaceuticals, you’re going to pay a massive tariff.”

The intent is to incentivize pharmaceutical manufacturing within the US, redirecting offshore profits toward domestic affordability initiatives.

Summary of the Article

The share prices of major Indian pharmaceutical companies such as Sun Pharma, Aurobindo Pharma, Gland Pharma, Cipla, Granules India, and Lupin fell sharply due to renewed pricing pressure from the United States.

US President Trump's direct communication with 17 global pharma CEOs, demanding price cuts and fair pricing policies, has shaken market confidence.

With a looming 60-day deadline and possible tariff impositions, the road ahead for Indian pharma companies heavily reliant on the US market looks uncertain, pushing investors to reassess their positions.