Indian pharmaceutical shares fell sharply on Tuesday after U.S. President Donald Trump signed an executive order to ramp up domestic drug manufacturing, stoking concerns over potential disruptions for Indian drug exporters that rely heavily on the U.S. market.
The Nifty Pharma index dropped 1.4% in early trade. Lupin led losses, sliding over 3%, with Aurobindo Pharma also down over 3%, followed by Cipla down more than 2%, and Sun Pharma dropping over 1.9%. Biocon edged lower by 0.3%.
The selloff followed Trump’s signing of an order on Monday aimed at cutting U.S. dependence on foreign-made medicines. The order directs the U.S. Food and Drug Administration (FDA) to accelerate approvals and bolster domestic manufacturing of prescription drugs, active pharmaceutical ingredients (APIs), and raw materials.
The move poses a risk for Indian drugmakers that count the U.S. as a critical market. Sun Pharma generated $474 million in U.S. revenue in the March quarter, over 30% of consolidated sales, with 72.7% of its total turnover in FY24 coming from exports. To offset pressures in its generics segment, Sun has been expanding its specialty business and exploring acquisitions.
Other major Indian exporters to the U.S. include Aurobindo Pharma, Dr Reddy’s Laboratories, Lupin, and Cipla — all facing heightened uncertainty following Trump’s action.
What’s in the order
The executive order instructs the FDA to review existing rules within 180 days and consider eliminating “duplicative or unnecessary requirements” to help domestic producers. It also seeks to improve enforcement of foreign manufacturers’ active-ingredient reporting, with potential public disclosure of noncompliant facilities.
FDA Commissioner Marty Makary said the agency plans to begin surprise inspections of overseas plants to align oversight with U.S. standards, Reuters reported. The Environmental Protection Agency has also been directed to speed up approvals for new facility construction.
Tariff threat raises stakes
Adding to market jitters, Trump said on Monday he plans to announce pharmaceutical tariffs within the next two weeks. The administration’s push to bring drug manufacturing back to the U.S. comes after repeated threats to impose tariffs on imports, a sector largely spared from trade wars due to concerns over patient access.
Also read | Senores Pharma shares in focus after deal to acquire USFDA-approved epilepsy drug from Wockhardt
( Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
The Nifty Pharma index dropped 1.4% in early trade. Lupin led losses, sliding over 3%, with Aurobindo Pharma also down over 3%, followed by Cipla down more than 2%, and Sun Pharma dropping over 1.9%. Biocon edged lower by 0.3%.
The selloff followed Trump’s signing of an order on Monday aimed at cutting U.S. dependence on foreign-made medicines. The order directs the U.S. Food and Drug Administration (FDA) to accelerate approvals and bolster domestic manufacturing of prescription drugs, active pharmaceutical ingredients (APIs), and raw materials.
The move poses a risk for Indian drugmakers that count the U.S. as a critical market. Sun Pharma generated $474 million in U.S. revenue in the March quarter, over 30% of consolidated sales, with 72.7% of its total turnover in FY24 coming from exports. To offset pressures in its generics segment, Sun has been expanding its specialty business and exploring acquisitions.
Other major Indian exporters to the U.S. include Aurobindo Pharma, Dr Reddy’s Laboratories, Lupin, and Cipla — all facing heightened uncertainty following Trump’s action.
What’s in the order
The executive order instructs the FDA to review existing rules within 180 days and consider eliminating “duplicative or unnecessary requirements” to help domestic producers. It also seeks to improve enforcement of foreign manufacturers’ active-ingredient reporting, with potential public disclosure of noncompliant facilities.
FDA Commissioner Marty Makary said the agency plans to begin surprise inspections of overseas plants to align oversight with U.S. standards, Reuters reported. The Environmental Protection Agency has also been directed to speed up approvals for new facility construction.
Tariff threat raises stakes
Adding to market jitters, Trump said on Monday he plans to announce pharmaceutical tariffs within the next two weeks. The administration’s push to bring drug manufacturing back to the U.S. comes after repeated threats to impose tariffs on imports, a sector largely spared from trade wars due to concerns over patient access.
Also read | Senores Pharma shares in focus after deal to acquire USFDA-approved epilepsy drug from Wockhardt
( Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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