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Indian Express
14-05-2025
- Business
- Indian Express
Will Trump's drug price order hit Indian generics? Here's what you need to know
While it still isn't clear how US President Donald Trump's new executive order on reducing prices of prescription drugs by 30 per cent to 80 per cent will play out, Indian pharmaceutical manufacturers say it is unlikely to hurt the market for Indian generics in the country. Trump said he would introduce a 'most favoured nation' (MFN) policy whereby pharma majors would have to bring down drug prices for American patients in line 'with comparably developed nations'. This, the Indian manufacturers say, will affect the patented drugs manufactured by big pharmaceutical giants. 'A friend of mine, a businessman… seriously overweight and he takes the fat shot drug. And, he called me up… and said president can I ask you a question? … I am in London and I just paid USD 88 and in New York I pay USD 1,300. What … is going on?' said Trump while announcing the measure. What does the executive order say? The executive order says that it will address 'global freeloading' and promises 'additional aggressive action' if manufacturers fail to offer the most-favoured-nation lowest prices to American patients. 'The inflated prices in the United States fuel global innovation while foreign health systems get a free ride…Americans will no longer be forced to pay almost three times more for the exact same medicines, often made in the exact same factories. As the largest purchaser of pharmaceuticals, Americans should get the best deal,' the executive order said. It says that the most-favoured-nation price targets will be communicated to the pharmaceutical manufacturers within 30 days. If that does not happen, the executive order adds, a plan would be made to impose it. Additionally, the executive order says that the Secretary of Health and Human Services shall facilitate direct-to-consumer purchasing programmes for pharmaceutical manufacturers who sell their products to American patients at the most-favoured-nation price. 'Most Indian companies sell products in the US through established distributors. They do not have distribution channels that will take the product to the nearby drug store,' said an expert from the pharmaceutical sector, on condition of anonymity. Will the move affect Indian manufacturers? It is unlikely. Almost all drugs sold by Indian manufacturers in the US are off-patent generics. 'The sale of these products is highly competitive and the prices offered are likely low anyway. It seems that the prices of only those drugs that are still under patent will be affected,' said Viranchi Shah from the Indian Drug Manufacturers Association. Sudarshan Jain, secretary-general, Indian Pharmaceutical Alliance, said: 'The generics industry is unlikely to be impacted as it operates on razor-thin margins. In the US, the generics industry represents 90 per cent of prescription volumes while accounting for only 13 per cent of the market value. Further details on implementation mechanisms will bring more clarity.' While there may be certain patented products that may be exported from India — through licensing agreements with global companies — it is a very small proportion of drugs exported from India. Importantly, the focus is on cutting costs after manufacturing in the supply chain. Hence, it will not affect any precursor compounds that India may be manufacturing, experts say. How much does India export to the United States? Nearly 47 per cent of all generics prescribed in the US are manufactured here. More than half of the prescriptions of five of the ten most common therapy areas — hypertension, mental health, medicines to control lipids, medicines for nervous system disorders, and anti-ulcer drugs — were supplied by India, according to data from IQVIA. The US is also the biggest importer of Indian drugs, accounting for 31.3 per cent of total Indian pharmaceutical export by value in 2024. India exported pharmaceuticals worth $ 8.7 billion to the US. Anonna Dutt is a Principal Correspondent who writes primarily on health at the Indian Express. She reports on myriad topics ranging from the growing burden of non-communicable diseases such as diabetes and hypertension to the problems with pervasive infectious conditions. She reported on the government's management of the Covid-19 pandemic and closely followed the vaccination programme. Her stories have resulted in the city government investing in high-end tests for the poor and acknowledging errors in their official reports. Dutt also takes a keen interest in the country's space programme and has written on key missions like Chandrayaan 2 and 3, Aditya L1, and Gaganyaan. She was among the first batch of eleven media fellows with RBM Partnership to End Malaria. She was also selected to participate in the short-term programme on early childhood reporting at Columbia University's Dart Centre. Dutt has a Bachelor's Degree from the Symbiosis Institute of Media and Communication, Pune and a PG Diploma from the Asian College of Journalism, Chennai. She started her reporting career with the Hindustan Times. When not at work, she tries to appease the Duolingo owl with her French skills and sometimes takes to the dance floor. ... Read More
Time of India
22-04-2025
- Business
- Time of India
Trump's tariffs shake global pharma—India at the crossroads of crisis and opportunity
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads US President Donald Trump early this month announced reciprocal tariffs, sending shockwaves globally, including in India. The move rendered India's pharmaceutical sector, a critical component of the country's trade surplus with the US, particularly vulnerable. A week later, Trump announced a 90-day pause on tariffs against all countries, except China, adding further uncertainty. While the US government said that the pause is temporary, Trump indicated that the US would soon impose major tariffs on pharmaceutical announcement comes at a time when the Indian government has been promoting the domestic pharmaceutical industry as the 'Pharmacy of the World', especially after its critical role in vaccines, essential medicines, and medical supplies during the Covid-19 pandemic. The sector now finds itself at a critical juncture, facing both fresh challenges and unprecedented ranks third in the world for drug and pharmaceutical production (by volume) and exports to nearly 200 countries, with the US as the leading destination. In the first 11 months of FY24, India's pharmaceutical exports to the US surged by 15% over a year, reaching $7.83 stakeholders told ET Digital they are concerned by the way Trump is rewriting the global trade norms but see opportunities if India plays its cards right. There is a consensus that Trump's high tariffs on Chinese pharmaceuticals are expected to create a market opportunity that India should pharma sector has escaped the harshest impacts of Trump's tariffs, says Virinchi Shah , former President of the Indian Drug Manufacturers Association (IDMA). 'I think it is because Trump also understands the win-wins of trading with us in the pharma sector,' he is hopeful that a trade deal could emerge within the 90-day window that the Trump administration has now extended. 'India and China have distinct USPs for the US market—India in formulations, China in APIs and biologics. Gaining some understanding during these 90 days would be highly beneficial. If that happens, the market share of Indian players will rise manifold. Leaving government efforts aside, our players need to redo their homework in the US market, exploring the void created, engaging with more industry associations, taking help from the embassy to reach American clients, and realigning our focus areas accordingly. Many segments might dry up, creating a void that we need to fill,' Shah the 90-day countdown begins, India's pharma sector is adjusting its strategies. The next three months could redefine India's engagement with the US and reshape global supply chains, according to industry also dismissed concerns about Chinese firms now resorting to dumping pharma products in India. 'We have enough safeguards, and every country will be watchful of China's actions in the coming days and months.'Mandeep Singh Basu, Director of New Delhi-based Jagat Pharma, shares Shah's optimism, stating, 'Trump's tariff onslaughts presented a great opportunity for Indian pharma and Ayurvedic companies. There is quite a gap in the supply of APIs and affordable medicines due to the US tariffs on Chinese pharmaceuticals. This phase goes beyond simply replacing China. India already holds certifications like WHO-GMP and ISO, strengthening global credibility.'He adds that the US will continue relying on India for essential medicines, especially for chronic diseases. 'But the relationship's longevity depends on reforms, innovation, and regulatory compliance.'Experts believe that India's pharma sector is comparatively better positioned than those of other nations. Nisha Taneja, professor at think tank ICRIER , says, 'Despite the Trump administration's imposition of reciprocal tariffs, India's pharmaceutical exports to the US remain largely insulated, with 99.9% of India's pharma export value exempted due to product exclusions specified in the executive order. This is not surprising, as a significant portion of the US population relies on affordable generic drugs. In fact, India is the 5th largest exporter of pharmaceuticals to the US.'As global trade rules are redrawn, the industry's unanimous view is that India's pharmaceutical industry must move swiftly—not just to seize the moment but to secure its place in a rapidly shifting global to Arushi Jain, Director - Growth and Strategy, Akums Pharma, the changing trade environment is a two-edged situation for India—possible disruption, but also a tremendous strategic opportunity. "India will have to act quickly and smartly. This involves improving regulatory coordination, and spending on innovation, strengthening the API infrastructure and indigenous capabilities. Cutting down on over-reliance and developing stronger trading relations with African, Southeast Asian nations etc will also be critical. Essentially, even as the short-term volatility may test the sector, India's pharma sector has a special opportunity to redefine its global presence for the better," she K Masurkar, CEO of Entod Pharmaceuticals, points out that India's pharmaceutical industry might face some short-term challenges, but in the long run, its position as a key global supplier, particularly to the US, remains strong. 'What India offers in terms of cost, quality, and scale is not easy to replace. Manufacturing the same medicines in the US would take time and lead to higher prices because of regulatory and pricing hurdles.'He also cautions against overdependence on one market. 'Over 30% of our pharma exports go to the US; that's risky. We must build stronger ties with Asia, Africa, and Latin America.'Domestically, too, according to Masurkar, there is untapped potential. 'Nearly 900 million Indians still pay full price for medicines. With better access, innovation, and investment, we can build a future-ready pharma industry that supports both India and the world,' he adds.
