India Pharma Stocks Slip: SEBI RA Adarsh Nimborkar Breaks Down Risks From Trump’s Drug Pricing Push

Trump’s Most Favored Nation (MFN) drug pricing policy could significantly compress margins, disrupt product pipelines, and force Indian firms to rework their U.S. strategies.

Indian pharmaceutical stocks were under pressure on Monday as U.S. President Donald Trump revived his drug price reduction strategy.  

He is expected to sign an executive order lowering the price of prescription medicines today. Sun Pharma traded 3% lower, Ajanta Pharma down 2%, Glenmark, Lupin and Biocon fell 1%.

The plan reintroduces the “Most Favored Nation” (MFN) pricing model, which mandates that Medicare reimburse drug prices at the lowest rates paid by countries like Germany, the U.K., Canada, and Japan — a potential 30-80% cut from current U.S. levels.

The impact on India, which supplies nearly half of the U.S.’s generic drugs, could be significant. 

SEBI-registered analyst Adarsh Nimborkar highlights the impact on major players: 

1. Sun Pharmaceuticals: Nearest support level seen at ₹1,555. The MFN policy could pressure pricing across its U.S. generics portfolio, potentially testing technical support if earnings come under pressure.   
   
   
2. Cipla: The stock could face temporary weakness as margins in the U.S. market compress. However, its innovation-led pipeline provides a cushion against prolonged downside. Nearest support seen at ₹1,425.
   
   
3. Lupin: The stock could experience pricing headwinds but may stabilize if new complex generics gain faster approval or if regulatory risks ease. Nearest support seen at ₹1,880.
   
   
4. Aurobindo Pharma: While it has a robust new drug application (ANDA) pipeline, pricing cuts could affect future launches and slow growth.   
   
   
5. Dr Reddy’s: Its differentiated portfolio may offer some pricing protection, but ongoing compliance costs could tighten margins.   

Nimborkar warns that the MFN model could erode already thin margins in the generics business. 

Companies that fail to comply may be excluded from Medicare reimbursements — a substantial commercial risk given the volume of prescriptions funded by the program.

Firms with deep U.S. pipelines could also face delayed launches and reduced investment returns as regulatory timelines shift and price benchmarks drop.

Additionally, Trump’s rhetoric on imposing tariffs on pharma imports from India further complicates the outlook.

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