The shares of leading pharma majors fell in trade on September 15, weighing on the Nifty Pharma index by more than a percent in mid-day trade and as the gauge snapped a four-day gaining streak on profit booking at elevated levels.
The Nifty Pharma index emerged as one of the top losing sectors in the trading session for the day.
Top Pharma Losers
Dr Reddy's shares were the top loser on the index, down nearly 2 percent after the company disclosed an observation by the US Food & Drug Administration (USFDA) following a Pre-Approval Inspection (PAI) at its biologics manufacturing facility in Bachupally, Hyderabad on September 12. "We have been issued a Form 483 with five observations, which we will address within the stipulated timeline," the company said.
J B Chemicals and Pharmaceuticals shares fell 1.5 percent to trade at Rs 1,673.40 apiece.
Torrent Pharma, Biocon, Aurobindo Pharma, Glenmark Pharma and Natco Pharma shares fell more than a percent each, while Lupin, Zydus Life and Sun Pharma shares were down nearly a percent each. Ajanta Pharma, Cipla, Laurus Labs and Mankind Pharma shares were trading lower with marginal losses.
Bucking the trend, Granules and Abbott India shares gained more than a percent each while Gland Pharma, Alkem Labs, Divi’s Labs and IPCA Labs shares were in the green with marginal gains.
Uncertainty over Trump tariffs
Despite easing trade tensions between India and US, the fear of higher Trump tariffs on pharma imports weighed on Indian exporters. While increasing tariffs on Indian exports to a whopping 50 percent, US President Trump had exempted pharma supplies for such levy. However, earlier in August, Trump said he eventually plans to increase the tariffs on pharmaceuticals imported into the US to 250 percent, without elaborating on the timeline or other details. Most Indian pharma companies derive a major portion of their revenue from exports to the US market.
In an interview to CNBC International, Trump had said that he would begin with a “small tariff” but plans to raise it gradually - first to 150 per cent, and eventually to 250 per cent - within a year to 18 months. In April, the Trump administration had launched a Section 232 investigation into pharmaceutical imports, to examine if certain imports pose a threat to national security. “We want pharmaceuticals made in our country,” Trump told CNBC.
BioSecure Act
In 2024, the United States had introduced the BioSecure Act to enhance the security of biotechnology supply chains. While the bill successfully passed the House of Representatives, it failed to advance to the Senate. The bill sought to reduce China’s influence on America's biotech supply chains and safeguard against any potential biotech espionage.
A diluted version of BioSecure Act is now again back into consideration in the US, as per some news reports.
What Analysts Say?
"The Indian pharmaceutical sector has faced notable pressure in 2025, with leading companies seeing steep corrections amid pricing challenges in the US and regulatory headwinds...Despite these near-term headwinds, the structural outlook remains intact," said Kalp Jain, Research Analyst at INVasset PMS.
"India continues to supply over 20 percent of the world’s generic medicines, while rising domestic healthcare spending and insurance penetration provide steady growth drivers. Niche areas such as Contract Research, Development and Manufacturing (CRDMO) are gaining traction, with companies like Divi’s Laboratories and Piramal Pharma well-positioned to capture global outsourcing demand. Industry estimates suggest 25-30 percent potential upside in select CRDMO players, supported by strong order pipelines and differentiated models. Specialty drugs, complex generics, and branded formulations also offer promising opportunities to offset cyclical pressures in the US generics market," he added.
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The Nifty Pharma index is down nearly 5 percent so far this year, and a recovery is expected to be gradual, according to pharma analysts. Regulatory clarity, easing pricing pressure in exports, and sustained traction in specialty therapies will be key triggers, said one market expert.
"While generic-heavy portfolios may take longer to recover, companies with diversified product lines, strong balance sheets, and leadership in high-margin categories appear better placed. With valuations moderating after recent corrections, selective accumulation in quality names could offer attractive returns once the broader sector stabilizes," Kalp Jain said.
Santosh Meena, Head of Research at Swastika Investmart meanwhile said, "Pharma stocks are not following a uniform trend, as their performance is diverging based on company-specific fundamentals and news flows. However, the overall outlook for the sector remains positive, with the Nifty Pharma Index trading above all its key moving averages, indicating a bullish bias."
"Nifty Pharma Index has broken out of an ascending triangle pattern, signaling a bullish trend reversal. Sustained buying interest above key moving averages indicates renewed momentum, positioning pharma stocks for further upside in the coming sessions.Laurus Labs, Zydus Life, and Lupin exhibit bullish chart patterns, breakouts above key averages, signaling strong technical upside momentum," said Vishnu Kant Upadhyay, Assistant Vice President – Research & Advisory at Master Capital Services Limited.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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