How Trump's Drug Price Cuts Could Impact Global Markets, Especially India

US Drug Price Cuts: A Global Ripple Effect

Washington: The recent announcement by US President Donald Trump regarding significant reductions in prescription drug prices is anticipated to have a substantial impact on global pharmaceutical markets, particularly affecting India's generics sector. This move aligns with the US's shift towards international price benchmarking.

Trump stated that Americans will soon benefit from prices no higher than the lowest available globally, declaring, "You’re going to get most favoured nations pricing."

This declaration was made in the presence of key officials, including HHS Secretary Robert F. Kennedy Jr., Commerce Secretary Howard Lutnick, CMS Administrator Mehmet Oz, and FDA Commissioner Marty Makary, along with leaders from major pharmaceutical companies.

According to Trump, for many years, Americans have been subjected to the highest drug prices worldwide. He revealed that pharmaceutical companies have consented to substantial price cuts on essential medications, claiming, "We signed historic agreements… to reduce prices by 300, 400, 500, 600 and even 700 percent."

Notable executives in attendance included Sanofi's Paul Hudson, Novartis's Vas Narasimhan, Genentech's Ashley Magargee, Gilead's Dan O’Day, GSK's Emma Walmsley, Merck's Robert Davies, and Amgen's Peter Griffith.

Trump emphasized that tariffs would be utilized to encourage foreign governments to adjust their pricing structures, stating, "We would never be able to do this without the use of tariffs."

He further asserted that US drug prices would soon rank among the lowest in developed nations, promising, "So we will get the lowest price anywhere in the world."

Additionally, Trump linked this policy to the expansion of pharmaceutical manufacturing within the US, noting, "They’re coming in, and they’re building already."

As one of the largest producers of generic medications globally, India plays a crucial role in supplying affordable treatments to the US market, especially for chronic illnesses.

Indian drug prices are frequently among the most competitive worldwide, making any US initiative towards global price benchmarking a significant concern for Indian pharmaceutical exporters, given the critical nature of the American market for India's drug industry.