Citibank: US drug price reforms pose a negative impact on Indian pharmaceutical stocks.

Citigroup analyst Vivek Agrawal said that the feasibility of President Trump's plan to lower prescription drug prices in the United States is still uncertain, but the news still represents a negative for Indian pharmaceutical stocks overall. If prices were to drop by 30-80%, it would typically apply to public healthcare systems such as federal health insurance and Medicaid, but the specific scope of this potential executive order is still unclear. Citigroup believes that the high cost of drugs in the US is due to the insurance system, and also reflects the profit margins of middlemen. Simply lowering the sticker price may not truly solve the issue. Indian pharmaceutical companies involved in branded drugs/specialty drugs are most affected, while generic drug manufacturers are least affected. Sun Pharma fell 3.1% and Aurobindo Pharma fell 2.7%.