Aurobindo Pharma, Biocon, Glenmark shares fall over 5%; here is why pharma stocks are falling on Thursday

Shares of drug makers were trading sharply lower on Thursday, April 2. The measure of pharma shares on the National Stock Exchange (NSE) dropped as much as 3.75% or 826 points to hit an intraday low of 21,185 with all 20 shares in the index trading lower.

The Indian pharmaceutical industry is heavily dependent on the US, which is its largest export market, accounting for nearly 40-50% of its exports, analysts said. India supplies roughly 40-50% of all generic drugs consumed in the US, making it critical for revenue generation for Indian companies, analysts noted.

Biocon was top loser in the NIFTY Pharma index, the stock dropped 5.31% to ₹345. Glenmark, Aurobindo Pharma, Sun Pharma, IPCA Labs, JB Chemicals, Torrent Pharma, Lupin and Piramal Pharma also dropped between 4% and 5%.

The Trump administration has been considering a 100% tariff on imported branded and patented medicines, prompting global drugmakers to ramp up US manufacturing and stockpile inventory.

Pfizer and AstraZeneca have secured multi-year tariff exemptions through pricing deals and commitments ‌to ⁠the new TrumpRx.gov platform. Eli Lilly, Johnson & Johnson and Merck have pledged billions to expand US operations to avoid penalties.

Companies that do not have ⁠agreements and are not in negotiations with the administration will be subject to 100% tariffs, the ⁠report said.

The plans are not final and could still change, and there could ⁠also be exemptions for some medicines and disease categories, it said.

As of 9:43 am, the NIFTY Pharma index was top sectoral loser on the NSE. The index was down 3.51% with all the 20 constituents trading lower.

The index was underperforming the NIFTYO50 index which was down 1.91%.