While benefiting American consumers, this policy may create pressure on pharmaceutical companies to recoup revenue elsewhere, particularly in markets like India.
Digital Desk: President Donald Trump’s new executive order on prescription drug pricing, which aims to reduce US prices by 30-80% through a “Most Favoured Nation” policy, could have significant global consequences.
While benefiting American consumers, this policy may create pressure on pharmaceutical companies to recoup revenue elsewhere, particularly in markets like India.
The Global Trade Research Initiative (GTRI) warns the pharmaceutical companies might respond by pushing for stronger productions in international markets to offset US losses.
This could come through trade agreements containing “TRIPS-Plus” provisions that extend patent monopolies.
For India, it is known for its vigorous generic drug industry and affordable medicines, these pressures could threaten the existing regime which prioritize public health access.
If India demands for stricter protections, it might face delayed generic drug availability and higher medicine cost for its population.
The announcement initially rattled Indian Pharmaceuticals stocks, which dropped by 2.5% before stabilising.
As global pharmaceutical pricing recalibrates in response to the US policy, countries like India will need to carefully balance trade relationships while protecting the domestic healthcare systems and medication affordability.
