Pharma Stocks Down Up to 5% as Trump Urges Lowering Drug Prices; Which Companies Have the Most Exposure?

Pharma stocks were under heavy pressure on Friday, with the Nifty Pharma index dropping nearly 3% intraday to hit a low of 22,122.65. The sharp fall was triggered by fresh concerns over US trade policy after President Donald Trump announced a 25% tariff on Indian imports earlier this week.

While key pharmaceutical items like drug formulations and APIs remain exempt, investor sentiment has been shaken by the broader protectionist tone and uncertainty around future regulatory actions, as per news reports.

Nifty Pharma Stocks Performance: August 1, 2025

The following Nifty Pharma heavyweights were trading lower as of 12:50 PM on the NSE, contributing significantly to the index’s decline.

Let’s take a look at why markets have reacted sharply and which Indian pharma companies have the highest exposure to the US market.

US Tariffs and Drug Pricing Pressure Raise Red Flags for Pharma Investors

The recent sell off in pharma stocks was sparked by the announcement of a 25% tariff on Indian exports to the US, prompting concerns that pharmaceuticals could be included in future revisions.

While drug formulations and APIs remain exempt under the April 2025 framework, the lack of clarity has led investors to price in potential regulatory risk.

Compounding the concern, President Trump issued letters to 17 major global drugmakers, asking for lower prices on existing medicines and commitments to align future drug prices with international benchmarks.

The letters set a 60 day timeline for voluntary compliance, creating an overhang for the sector as markets await further action from US authorities.

Indian Pharma Stock Exposure to the US Market

The US is the largest export destination for Indian pharmaceutical companies, especially for generic drugs. According to news reports, a significant portion of revenue for Indian pharma companies comes from the US market:

This high dependency explains the sharp market reaction even though pharma-specific tariffs are not yet in place.

Read More: Sun Pharma Q1 FY26 Earnings Results: Net Profit Falls 20% to ₹2,279 Crore, Revenue Grows 9%.

Conclusion

While pharmaceutical products are currently excluded from the latest round of US tariffs, the broader signals from Washington around pricing reforms and trade restrictions have introduced a layer of uncertainty for Indian pharma companies.

Given their significant exposure to the US market, any future policy changes could have material implications. For now, investors are likely to remain cautious until more clarity emerges on the direction of US trade and healthcare policy.

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