Trump's Prescription Drugs Price Cut May Spur Price Increase In Indian Market

US President Donald Trump's plan to sign an executive order to slash prescription drug prices by 30-80% may result in a global price adjustment, with pharmaceutical companies pressing lower-cost countries like India to increase prices, according to the economic think tank Global Trade Research Initiative.

The push to raise prices may occur due to manufacturers attempting to recoup their losses and research and development expenses from the countries where drug prices are currently relatively lower.

"It is likely to trigger a global price recalibration, with pharmaceutical giants intensifying pressure on lower-cost markets like India to raise their prices by tightening patent laws through trade negotiations," Global Trade Research Initiative Founder Ajay Srivastava said on Monday.

Trump's most-favoured nation pricing policy should be a wake-up call, as pharmaceutical companies face tighter price controls in the West, they will redouble their efforts to raise prices in markets like India, he said.

"The battleground is no longer just legal, it has moved to trade negotiations. India must respond with strategic clarity and unyielding resolve," he added.

He reaffirmed India's requirement to stick to their patent regime amid global drugmakers using free trade agreements to extract World Trade Organisation-plus commitments. Due to the fact that it facilitates affordable access, curbs monopolistic extensions and protects public health.

The intellectual property rights laws in India concerning pharmaceuticals are in full conformity with the stipulations of the WTO's Trade-Related Aspects of Intellectual Property Rights Agreement.

India has consistently resisted the adoption of TRIPS-plus provisions, which are more extensive patent protections often advocated by developed nations through free trade agreements. These include measures like data exclusivity, automatic patent term extensions, patent linkage, broader patentability criteria, and evergreening.

India does not allow data exclusivity. Instead, it permits regulatory bodies to rely on existing clinical trial data to approve generic medicines, ensuring faster and cheaper access.

The GTRI also said that by protecting traditional knowledge, rejecting evergreening, and keeping public health at the centre of its IP policies, India has become the global leader in generic drug production, supplying low-cost, life-saving medicines not just to its own population but to large parts of the developing world.

"From antiretrovirals for HIV to affordable cancer therapies, India's pharmaceutical industry is vital to global health," he said.

"The world depends on India's generics. Preserving this model is not only in India's interest - it is a moral and global necessity," it said.

Sharing similar views, Saurabh Agarwal, Tax Partner, EY, also said that while the move promises major savings for American consumers, it could face industry pushback and cause price increases in lower-cost countries as manufacturers seek to recover losses and research and development costs from these countries.

(With inputs from PTI)