Natco Pharma, Cipla, Other Pharma Stocks Surge Up To 4% As US Authorities Aim To Cut Drug Prices
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Last Updated: May 21, 2025, 12:32 IST
Pharma stocks in India rallied on May 21
Pharma Stocks Rise: Pharma stocks in India rallied on May 21 after the US Department of Health and Human Services (HHS) announced efforts to implement an executive order aimed at reducing healthcare costs. The HHS is urging drugmakers to align US prices for brand-name drugs—specifically those without generic or biosimilar competition—with the lowest prices offered in comparable OECD countries.
This development came as a relief for Indian generic and biosimilar manufacturers, as the proposed pricing reforms target only branded drugs, leaving generics unaffected. According to two analysts quoted by Reuters, the clarity around exclusions for generics helped lift market sentiment.
As a result, the Nifty Pharma index rose 1.7%, recovering from a 1.3% decline in the previous session, with 18 of its 20 constituents closing in the green. Gland Pharma led the gains, trading 3.5% higher at Rs 1,551.40. Shares of Natco Pharma and Cipla were up 2.39% and 2.32% at Rs 890 and Rs 1,491, respectively. Biocon and Granules India each rose over 2%, while Sun Pharma gained 2% ahead of its Q4 results, trading at Rs 1,742.
The HHS policy proposes that US prices for select brand-name drugs be benchmarked against prices in countries with a GDP per capita of at least 60% that of the US. While the initiative has roots in former President Donald Trump's push to lower drug prices by 59% to 90%, experts believe the plan could face legal challenges and be difficult to implement.
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Nonetheless, the news triggered a broad-based rally in Indian pharma stocks on expectations that generic and biosimilar manufacturers will remain insulated from pricing pressure in the US.
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