Pharma stocks gain on US tariff exemption on some specialty drugs

According to fresh market updates, Shares of pharmaceutical firms traded elevated on September 29 after the US exempted certain specialty drugs and related ingredients imported from India from tariffs. The exemption covers medicines used to treat rare medical conditions. Washington has granted zero-tariff treatment to pharmaceutical products from India and 19 other countries. More than half of the pharma stocks tracked traded in positive territory despite a broadly weak market.

According to a document published by the US Commerce Department in the Federal Register, the zero-tariff regime covers nuclear medicines, plasma-derived therapies, fertility drugs, cell and gene therapy products, antibody-drug conjugates, and medical countermeasures for chemical, biological, radiological and nuclear threats. The exemption additionally extends to other specialty pharmaceutical products and medicines used in animal health.

Dr Reddy’s Laboratories, Lupin and Zydus Lifesciences are among the firms anticipated to benefit from the tariff exemption, given their presence in specialty pharmaceuticals.

Shares of Nifty 50 pharmaceutical major Dr. Reddy’s Laboratories advanced more than 2% to a one-month high of Rs 1,247.70. The stock was on track for its third consecutive session of upside and had risen nearly 4% over the period. Among its Nifty 50 peers, Sun Pharmaceutical Industries and Cipla additionally traded elevated, gaining nearly 1% and 0.3%, respectively. Mankind Pharma was the top gainer across both the Nifty 200 and Nifty 500 indices, rising more than 4.5%. The Nifty Pharma index advanced 0.6%.

Besides India, the zero-tariff list includes Argentina, Bangladesh, Cambodia, Ecuador, El Salvador, the European Union, Guatemala, Indonesia, Japan, Jordan, Malaysia, North Macedonia, South Korea, Switzerland, Liechtenstein, Taiwan, Thailand, the UK and Vietnam.

The notice stated qualifying products from these jurisdictions may receive a zero per cent tariff as the countries have an existing or forthcoming trade and security framework agreement with the US.

The exemptions are part of the implementation of US President Donald Trump’s April proclamation on imports of pharmaceuticals and pharmaceutical ingredients under Section 232 of the Trade Expansion Act.