Indian Pharma Could Feel The Heat From Trump's Pricing Order, Caution Experts
Trump's actions will affect New Chemical Entities and patented drugs manufactured outside the US, according to Namit Joshi.
India's pharmaceutical exports may feel the heat from US President Donald Trump’s latest push to lower domestic drug prices through an executive order expected to be signed tomorrow, say trade and policy experts.
The executive order, which seeks to implement a Most Favoured Nation pricing policy, aims to peg Medicare payments for certain prescription drugs to the lowest prices paid by comparable economies such as Canada, Germany and the UK. The goal is to bring down drug costs for American consumers, however, Indian experts caution it could carry unintended global consequences.
"We feel Trump’s action would not impact the low-complexity generics market as there’s limited play on margins. However, it will affect New Chemical Entities and patented drugs manufactured outside the US," Namit Joshi, chairman of the Pharmaceuticals Export Promotion Council of India (Pharmexcil), told NDTV Profit.
Ajay Srivastava, founder of think-tank Global Trade Research Initiative, said while the move may offer immediate relief to American patients, 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.
India has so far largely been able to withstand foreign lobbying to amend its patent laws, he said.
"But this changed with the India–UK Free Trade Agreement. For the first time, India agreed to provisions that go beyond its Trade-Related Aspects of Intellectual Property Rights commitments, signaling a troubling shift in policy," he said.
This concession hands a victory to global pharmaceutical companies and opens the door to further demands in ongoing negotiations with the European Union and the United States, Srivastava said.
Saurabh Agarwal, Tax Partner at EY, said India may come under indirect pressure. "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 R&D cost from these countries," he said.
