No, Sacred Sword ignores opposing defense drops
If you use the Pokémon Showdown damage calculator and you put 1+ defense on the opposing Pokémon, it shows that Sacred Sword doesn’t factor in the defense boost for it’s damage, while other attacks do. If you do the same thing but drop the opposing Pokémon’s defense, it will show that Sacred Sword ignores the defense drop as well.
So basically, Sacred Sword does the same amount of damage if the opponent has a defense drop as if the opponent had normal defense or a defense boost.