Pharma stocks crack up to 10% as Trump warns of 'never seen before' tariffs

Strides Pharma Science Ltd, Aarti Pharma Ltd, Marksans Pharma Ltd, Laurus Labs and IPCA Labs led losers on the BSE Healthcare index, as the party got over in  the pharma pack early after the US President Donald Trump warned of 'never seen before' tariffs.

Pharma was only the ongoing basket that rallied the previous day, as the White House's fact sheet suggested the sector was exempted from the US April 2 tariffs. With the fresh warning, key concerns around price increase for the generic medicines in the US, drug shortages, rationalisation in low-margin products and supply chain disruption are back on investor radar.

Strides Pharma Science tumbled 9.80 per cent to Rs 631. Aarti Pharma lost 9 per cent to Rs 734. Marksans Pharma dived 7.81 per cent to Rs 214.85. Laurus Labs and IPCA Labs declined 7 per cent each. Granules India, Lupin, Gland Pharma and Cipla fell 5-6 per cent. Sun Pharmaceutical Industries slipped 5 per cent while Dr Reddy's Labs was down 4 per cent.

Speaking on Air Force One, Trump said pharma tariffs are going to come in at levels that have not been seen before. He said the US was looking at pharmaceuticals as a separate category.

"We will be announcing that sometime in the near future, and not too distant future. It's under review right now," Trump said.

India exports pharmaceuticals goods worth $10 billion to the US, which is 6 per cent of US pharma imports and 2.5 per cent of the total medicine spend. This is trivial compared with European imports of more than $110 billion.

"As generics provide over $400 billion in annual savings to the US healthcare sector, we think imposing tariffs on generic pharma would be counterproductive," said Nuvama Institutional Equities.

HDFC Securities said it has assumed multiple scenarios for tariff pass-on such as 100 per cent tariff to be borne by Indian pharma companies which will have a negative impact of 3-45 per cent on FY27 Ebitda across our coverage universe. The impact would be higher for companies such as Aurobindo, Dr Reddy’s, Lupin, Sun Pharma, and Zydus Life. A 50 per cent tariff to be borne by Indian pharma may lead to 2-22 per cent impact on FY27E Ebitda, he said.

A 35 per cent tariff (1/3rd of total tariff) would impact FY27 Ebitda by 1-16 per cent, it said.