Sun Pharma, Biocon and Other Pharma Shares Tumble After Trump Targets Drug Pricing on Social Media

On Monday, May 12, 2025, Indian pharma shares saw sharp declines, following a controversial social media post by U.S. President Donald Trump regarding aggressive drug pricing reforms.

Shares of Sun Pharma dropped by 5%, while other major players like Biocon, Suven Pharma, Aurobindo Pharma, Lupin, Divi's Laboratories, and Glenmark fell between 1% and 3%. These stocks ranked among the biggest losers on the Nifty 500 index.

Reason Behind Sell-Off

The sell-off was triggered after Trump announced on his platform, "Truth Social", that he intends to sign an executive order at 9 AM Washington time on Monday. The order aims to slash the cost of prescription drugs by 30% to 80% immediately.

Trump further stated that the U.S. would adopt a "Most Favoured Nation" pricing policy, under which it would pay no more than the lowest price available globally for pharmaceutical products. He claimed this initiative would reduce U.S. healthcare costs by “numbers never even thought of before.”

While the proposed policy seems primarily targeted at high-cost branded and innovative drugs, the move could indirectly affect prices of generic drugs as well. Although generics typically offer 80–90% cost savings post-patent expiry, their prices may come under further pressure if the branded drug benchmark drops significantly.

Nifty Pharma Index Performance

The Nifty Pharma index has remained flat over the past month but is down 10% year-to-date in 2025. Monday’s trading added further pressure, with the index declining another 2%.

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