Pharma stocks: Sun Pharma, Aurobindo, Gland, DRL in focus after Trump tariff warning

Pharmaceutical stocks such as Aurobindo Pharma Ltd, Sun Pharmaceuticals Industries Ltd, Dr Reddy's Laboratories Ltd (DRL), Gland Pharma Ltd and Lupin Ltd came under the spotlight on Tuesday following remarks by US President Donald Trump, who indicated that tariffs on imported pharmaceuticals could be imposed in the “not-too-distant future,” according to a Reuters report. This follows an earlier warning from the President about imposing "never seen before" tariffs on drug imports into the US.

Initially, the pharmaceutical sector was exempt from the 'Liberation Day' tariffs, as outlined in a White House fact sheet. However, the latest statements have sparked concerns across the industry regarding potential price hikes for generic medicines, disruptions in global supply chains, possible drug shortages, and the rationalisation of low-margin products.

Earlier, speaking at a fundraiser dinner for his Republican Party, Trump had said, “We’re going to be announcing very shortly a major tariff on pharmaceuticals. And when they hear that, they will leave China.” In 2024, the US imported $213 billion worth of medicines - more than two and a half times the total a decade earlier. 

Aurobindo Pharma and Gland Pharma have fallen 6-10 per cent each in the past one week and 20-23 per cent in 2025 so far. Glenmark Pharma is down 10 per cent for the week month period and 14.45 per cent year-to-date. Sun Pharma has fallen 2.95 per cent in the past one week; Zydus Lifesciences has declined 1.73 per cent, Dr Reddy's Labs 2.23 per cent and Lupin 4.14 per cent, respectively. Cipla is up 0.4 per cent in the past one week. 

"Within our formulations/biosimilars coverage, at 45-50 per cent, ARBP and BIOS have the highest US Ebitda contribution. Unlike generics, where US has a very high dependency  on India, US is not as dependent on India for biosimilars. Hence, for biosimilars, it will not be easy to pass on higher tariffs to US patients. Compared to US generics, Sun Pharma's specialty portfolio could be more impacted as existing higher price points could make it more challenging to pass on higher costs," Kotak said earlier this month.

"Sticking to our base case of potentially high tariffs unlikely to sustain, we reiterate our positive  stance on generics—Sun Pharma, Cipla, Lupin, JB and Emcure are our top picks," it said.