Pharma shares drop as Trump's phased US tariff plan for generic drugs

The Nifty Pharma index declined 1.16% to 25,790.70, giving up part of the 1.75% gain it had logged over the previous two trading sessions.

Lupin dropped 3.32%, Piramal Pharma declined 3.25%, Aurobindo Pharma fell 2.73%, Gland Pharma slipped 2.62%, and Wockhardt lost 2.56%. Other major losers included Ajanta Pharma (-2.45%), Sai Life Sciences (-2.04%), Zydus Lifesciences (-1.77%), Cipla (-1.59%), Glenmark Pharmaceuticals (-1.49%), Alkem Laboratories (-1.34%), Dr. Reddy's Laboratories (-1.25%) and Sun Pharmaceutical Industries (-0.91%). Mankind Pharma declined 0.86%, Torrent Pharmaceuticals fell 0.80%, IPCA Laboratories slipped 0.78%, Laurus Labs shed 0.45%, Biocon lost 0.37%, and Abbott India edged down 0.14%.

Trump announced that generic medicines imported into the US will continue to attract zero tariffs for two years from 1 August 2026. The tariff will then rise to 100% from 1 August 2028 for one year, before increasing to 200% from 1 August 2029. He said the phased rollout is intended to encourage pharmaceutical companies to shift generic drug manufacturing to the US, while companies that fail to establish manufacturing facilities within the stipulated period would face penalties. The policy does not alter the administration's approach toward patented, branded and innovative medicines.

The proposal has put the spotlight on Indian drugmakers, which are among the largest suppliers of generic medicines to the US. The United States is the biggest export market for India's pharmaceutical industry, making the proposed tariff roadmap a key long-term consideration for production and investment plans.

Industry experts said shifting generic drug production to the US would materially increase costs.

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