Trumps smashing tweet puts brakes on rising pharma stocks

An abrupt hike in the price of drugs by pharma companies was slammed by US President, Donald Trump in his tweet wherein he specifically commented on Pfizer. Most of the pharma shares listed on Indian exchanges traded in the red during Tuesday’s trading session with Cadila, Lupin, Auro Pharma and Sun Pharma leading as top losers, while Pfizer traded marginally up with 0.3 per cent gains.

According to Trump, pharma companies raised the prices without any reason while giving bargain basement prices to other countries in Europe and other places. Pfizer increased prices of 40 drugs, and many pharma companies followed the suit by hiking prices of their medicines. However, Pfizer reiterated stating that it modified prices of 10 per cent of its drug list and it has also decreased prices of few drugs where needed. Moreover, the company added that the list does not reflect the effective prices that most patients or insurance companies pay due to rebates to payers and others in the supply chain.

Reacting to this news, the Nifty Pharma index which represents major pharma stocks was seen consolidating for the third week now, after a sharp rise from its recent bottom of 7,900 levels made on around May 25. Meanwhile, the index also broke its major resistance at 9,110 levels. Going forward, the level of 9,450-9,470 will act as resistances, while 9,080 will act as a support.