A significant overhaul in U.S. drug pricing policy could have unintended ripple effects across the global pharmaceutical landscape, with India potentially facing higher medicine costs, according to the Global Trade Research Initiative (GTRI).
The concern follows U.S. President Donald Trump’s proposed executive order to slash prescription drug prices in the U.S. by up to 80% under a “Most-Favoured Nation” (MFN) pricing model. The MFN approach seeks to benchmark U.S. drug prices to the lowest charged among economically comparable nations, a move that, while aiming to make medicines affordable for Americans, could shift the cost burden to emerging markets like India.
GTRI Founder Ajay Srivastava Said:
“This is likely to trigger a global price recalibration,” said Ajay Srivastava, founder of GTRI. “Pharmaceutical majors will attempt to offset potential revenue losses by intensifying pressure on lower-cost markets such as India, particularly through trade negotiations that demand stronger patent protections.”
The underlying worry is that multinational pharmaceutical companies, constrained by price ceilings in high-income markets, may look to countries like India to recover margins and recoup R&D investments. This could come in the form of higher drug prices or demands for stricter intellectual property (IP) regimes via free trade agreements (FTAs).
India’s present patent regulations, in compliance with the WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS), permit the early market introduction of generic drugs and ban the practice of patent evergreening. These provisions have made the nation a hub for low-cost medicines worldwide, ranging from antiretrovirals to cancer treatments.
However, Srivastava warned that the “battleground is no longer just legal, it has shifted to trade negotiations.” He stressed the importance of India maintaining strategic clarity and resisting pressure to adopt so-called “TRIPS-plus” provisions, which include extended patent terms, data exclusivity, and broader patentability standards that could hinder generic competition.
Saurabh Agarwal, Tax Partner at EY, echoed the concern. While the MFN policy may deliver short-term gains for American consumers, he noted that it risks creating pricing pressures in markets like India.
“Manufacturers may push for price hikes in countries where margins have traditionally been lower, which could affect affordability,” he said.
India has consistently resisted inclusion of TRIPS-plus clauses in its trade pacts, asserting that its existing IP framework strikes a balance between innovation and public health needs. The pharmaceutical industry, which plays a crucial role in global medicine supply chains, particularly to the developing world, could face growing strain if external pricing pressures intensify.
“The world depends on India’s generics,” GTRI stated. “Preserving this model is not only in India’s interest, it is a global moral imperative.”
As negotiations progress and U.S. policy changes become operational, India’s position on intellectual property and drug access is likely to face scrutiny once again.
Inputs From: TOI
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