Glenmark, Biocon, Aurobindo slip 3% on Trump's generic drug tariff plan

The US President Donald Trump announced a proposal to impose phased tariff (up to 200%) regime on imported generic medicines aimed at encouraging pharmaceutical manufacturing within the United States.

Nifty Pharma index movement

 

Shares of pharmaceutical companies were under pressure with the Nifty Pharma index falling nearly 2 per cent on the National Stock Exchange (NSE) in Wednesday’s intra-day deals on profit booking after the US President Donald Trump announced a proposal to impose a phased tariff regime on imported generic medicines aimed at encouraging pharmaceutical manufacturing within the United States (US).

 

Nifty Pharma index slipped 1.7 per cent to 25,639.70 in intra-day deals. The pharma index, however, erased half of its intra-day loss and was traded 1 per cent lower at 25,385.30 on the NSE at 09:20 AM. In comparison, the Nifty 50 was down 0.36 per cent at 24,101.15, data shows.

 

Glenmark Pharmaceuticals, Biocon, Ajanta Pharma, Zydus Lifesciences, Sai Lifesciences, Cipla, Piramal Pharma and Aurobindo Pharma slipped 3 per cent each, while Lupin, Wockhardt, Gland Pharma and Sun Pharmaceutical were down 2 per cent each.

 

Meanwhile, in the past month, the Nifty Pharma index outperformed the market rallying 7 per cent, as compared to 0.72 per cent rise in the Nifty 50 till Tuesday. Thus far in the calendar year 2026, the pharma index zoomed 15 per cent, as against 7.4 per cent decline in the benchmark index. The Nifty Pharma index hit a record high of 26,135.75 on July 16, 2026.

 

Trump announces 100% tariff on imported generic drugs from August 2028

 

According to a Bloomberg report, generic drug manufacturers will have two years to move production to the US or face a 100 per cent import duty from August 2028, President Donald Trump said in a social media post Tuesday. That levy would then double a year later, to 200 per cent, in August 2029.

 

Under the proposal, generic drugs imported into the US would face a 0 per cent tariff for two years starting August 1, 2026, after which tariffs would increase to 100 per cent for one year and 200 per cent thereafter for companies that do not establish manufacturing facilities in the US within the specified period. 

 

Trump said the policy is intended to reshore generic pharmaceutical production and strengthen domestic drug manufacturing, while clarifying that the existing policy for patented, branded and innovative medicines will remain unchanged. If implemented, the proposal could have significant implications for generic drug exporters, including Indian pharmaceutical companies with substantial exposure to the US market, said analysts at ICICI Securities.

 

Although this development is not available in fineprint, Indian Pharma exporters with major exposure to the US like Gland Pharma, Aurobindo Pharma, Granules, Dr. Reddys Laboratories, Zydus Lifesciences including others will have a sentimentally negative price reaction to this development, the brokerage firm said in a note, adding it will continue to monitor the situation and a keep a tab on the development.  ===========================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.