Why pharma stocks in India are down 7% today
What's the story
Stocks of Indian pharmaceutical companies such as Sun Pharma, Lupin, Biocon, and Aurobindo Pharma fell up to 7% today.
This came after US President Donald Trump announced an executive order to cut drug prices in America by 30-80%.
His proposed strategy is to align US drug prices with those of other countries.
Plan
What does Trump want?
Trump said, "I will be instituting MOST FAVORED NATION'S POLICY whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World." The announcement has caused a major drop in shares of leading Indian pharmaceutical companies.
Stock impact
Sun Pharma shares plunge heavily
Sun Pharma's shares plummeted by as much as 7% to ₹1,623.50 in opening trade today.
This was a huge drop from their previous closing price of ₹1,744.85 on the Bombay Stock Exchange (BSE).
Other pharma companies also witnessed a fall in their stock prices, after Trump announced possible drug price cuts in the US market.
Market reaction
Lupin and Biocon also see significant drops
Shares of Lupin Ltd fell 3.15% to touch a low of ₹1,973.95 today morning.
Similarly, Biocon's stocks fell as much as 3.66% in opening trade to hit a low of ₹317.90 on the BSE.
Aurobindo Pharma Ltd and Divis Laboratories Ltd also saw a major drop in their stock prices.