Trump’s drug pricing order targets Big Pharma, but Indian generics may benefit

The Executive Order issued by US President Donald Trump to enforce the most favoured nation prescription drug pricing in that country could hit innovator pharmaceutical companies harder than generic medicine manufacturers.

The Order, issued on May 12 says that within 30 days, pharma companies that are using US research funds to develop drugs but charge US patients more for the medicines than what is being charged for patients in other countries will be given most-favoured-nation price targets to bring prices for American patients in line with comparably developed nations.

“The Executive Order issued by the US Government seeks to balance innovation, access and overall healthcare costs. Research and development in life sciences demands long-term commitment, substantial investment, and carries high risk. The Order emphasises that the cost of the innovation should be shared equitably among all stakeholders. Innovator companies are expected to be affected, with a 30-day window to align their U.S. prices with Most-Favoured-Nation (MFN) pricing”, Sudarshan Jain, Secretary General, Indian Pharmaceutical Alliance (IPA) says.

According to him, the generics industry which IPA represents is unlikely to be impacted, as it operates on razor-thin margins. “In the US, the generics industry represents 90% of prescription volumes while accounting for only 13% of the market value. The generics industry plays a pivotal role in ensuring medicines remains affordable and accessible”, Jain said, adding that further details on implementation mechanisms (of the Executive Order) will bring more clarity.

Meanwhile, Delhi based global trade think tank Global Trade Research Initiative (GTRI) said Trump’s Drug Order is a wakeup call for Indian government’s pharmaceutical policy as it is likely to trigger a global price recalibration by innovator pharmaceutical multinationals. “India’s pharmaceutical laws fully comply with the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). However, India has long resisted pressure to adopt “TRIPS-plus” provisions—additional patent protections often pushed by developed countries through Free Trade Agreements (FTAs). These include data exclusivity, automatic patent term extensions, patent linkage, broader patentability criteria, and evergreening practices. As pharmaceutical companies face tighter price controls in the West (due to Trump’s drug pricing policy), they will redouble their efforts to raise prices in markets like India. The battleground is no longer just legal—it has moved to trade negotiations. India must respond with strategic clarity and unyielding resolve”, says Ajay Srivastava, founder GTRI.