Cipla Sees Minimal Impact From Trump Order On Cutting US Drug Prices
Cipla's Umang Vohra said President Donald Trump's Executive Order issued this week will likely have implications for branded medications.
The Trump administration's recent directive to pharmaceutical companies to reduce prescription drug costs in the US within a month is unlikely to affect Indian generic drug manufacturers, a senior official at Cipla Ltd. said on Tuesday.
Managing Director and Global CEO Umang Vohra said President Donald Trump's Executive Order issued this week will likely have implications for branded medications.
"What we understand is that this is largely targeted towards branded drugs... As of now, what we understand is that this is a voluntary measure that perhaps the companies will be taking," Vohra said during a press conference after the release of fourth-quarter earnings.
He noted that there are aspects of 'Most Favoured Nation' clauses that are not clear as of now, besides the implementation of the executive order.
"So as of now, from a generic perspective, I think generic (drug) prices in the US are already significantly comparable with the rest of the world, in some cases it is lower. So we don't believe that at least for now, based on what the promulgation says we think this is more (towards) branded sector...rather anything on the generic side," Vohra said.
On May 12, an executive order was signed in the US, mandating a 30-day timeframe for pharmaceutical manufacturers to decrease the cost of prescription medications. This order directs the health department to negotiate new pricing for drugs. Should an agreement not be reached, a regulation will be enacted to link the prices the US pays for medications to the lower prices paid in other nations.
Responding to an inquiry about the potential impact of US government taxes on pharmaceutical imports on Cipla's operations, Umang Vohra said, "Our business continues as usual. There has been no disruption at any point in the US due to any uncertainty regarding tariffs."
"And so we don't see the impact. In any case, we are in the generic sector. The purpose of what we do is to provide medicines to people who really need it from an affordability perspective. So as of now, we don't see any impact of tariffs on our business," he added.
India currently levies about 10% import duty on American drugs while no charges are levied on Indian drugs being imported by the US. The Trump administration is likely to impose tariffs on drug imports into the US in the days to come.
In April, the US government exempted the Indian pharma sector from reciprocal tariffs, recognising the vital role played by the domestic industry in supplying affordable medicines across the globe.
(With inputs from PTI)
