Trump's drug price cut may not hurt Indian firms much

Pharma shares plunge intraday, but recover swiftly ahead of US prescription drug price cuts

- Jessica Jani

US President Donald Trump on Monday signed an executive order directing drugmakers to match prices with those in other wealthy nations.

The US government will give pharmaceutical companies price targets in the next 30 days and will take further action to lower prices if firms do not deliver 'significant progress'. In a press conference, Trump said that he was seeking cuts between 59% and 90%. This is higher than what Trump had initially sought.

Trump on Sunday said in a post on Truth Social that he would sign an executive order Monday morning to bring down the prices of prescription drugs by 30% to 80%. In a subsequent post, he vowed to slash prices by 59%.

He said the objective is for the US to pay the same price as the nation that pays the lowest price for a drug anywhere in the world. Shares of Indian pharma companies plunged by up to 6% intraday after Trump's price cut proposal for prescription drugs in the US, before recovering on expectations local firms may not be affected significantly.