Nifty Pharma drops 2% after Trump reveals plans to lower US drug cost

Nifty Pharma index slumped 2.3 per cent in trade on Monday (May 12, 2025) after reports suggested that US President Donald Trump is planning to lower prescription drug prices by making sure Americans don't pay more than people in the cheapest countries.

 

At 9:45 AM, among 20 constituents on Nifty Pharma, 13 declined. Sun Pharma, Biocon, Lupin, Divi's Laboratories, and Aurobindo Pharma were the biggest losers slipping between 4.7 per cent to 2.12 per cent. That apart, Glenmark Pharma and Ipca Laboratories tumbled over 1 per cent.  Read Stock Market Updates Today LIVE 

Trump's plan to cut drug prices

The US President has predicted that pharmaceutical prices could drop 30  per cent to 80 per cent in America. He also said that prices would likely “rise throughout the world to equalise and, for the first time in many years, bring 'fairness to America'.

 

 

He intends to institute what he called a most-favoured nation policy “whereby the US will pay the same price as the Nation that pays the lowest price anywhere in the World.” Healthcare costs in the US “will be reduced by numbers never even thought of before."

 

Read More: Donald Trump seeks to align US drug costs with cheapest ones abroad

 

According to reports, Americans pay the highest prices for medicines, which helps fund innovation and supports the growth of the pharmaceutical industry. Drug companies argue that changing the system would cut their revenue and slow down the development of life-saving treatments.

 

Trump cited the industry’s argument, but said it meant that “the ‘suckers’ of America” ended up bearing those costs “for no reason whatsoever.”

 

However, he did not specify potential limits on the policy, such as whether it would apply only to government programs such as Medicare or Medicaid, if it would be limited to certain drugs or categories of drugs, or if the White House sees a way to apply this more broadly. 

 

Under the Inflation Reduction Act passed in 2022 during President Joe Biden’s term, the US government had started negotiating prices for some of the most expensive medicines covered by Medicare. So far, only certain drugs have been included, but future rounds may also target drugs given by doctors.