How Pharma Stocks Reacted To Trump's 200% Tariff Threat On Generic Drugs

The shares of Indian pharmaceutical companies plummeted in early trade on Wednesday, July 22, after the US President Donald Trump, announced a phased tariff imposition plan linked to generic drugs.

The Nifty Pharma fell nearly 2% in trade on Wednesday, with all its constituents trading lower.

Lupin, Gland Pharma, Aurobindo Pharma, Ajanta Pharma, Sai Life Sciences and Zydus Lifesciences shares were among the top losers on the Nifty Pharma index, falling over 2% each.

Piramal Pharma, Alkem Labs, Cipla and Glenmark Pharmaceuticals shares were also among the top losers.

Trump's Tariff Trick To Boost Domestic Generic Drug Production

In a recent Truth Social post, Trump penned that after a two year period starting August 1, 2026, 100% tariffs will be slapped on generic drug makers, followed by a 200% tariff imposition.

Further, he noted that the policy was designed to encourage generic drug manufacturers to establish production facilities within the US, describing the higher tariffs as a penalty for companies that fail to relocate manufacturing during the transition period.

The policy specifically targets generic pharmaceuticals, while tariffs on patented and branded drugs will remain unchanged under the current framework.

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90% of the US market for Indian drugmakers in terms of volumes is via generic drugs. Out of the total generic drugs imported by the US, 40% come from India. Indian Pharma exports are valued at around $10 billion to the US and the country also has the largest number of USFDA plants outside India at around 670.

Notably, manufacturing a generic drug in India costs nearly 30% to 50% less than the US.