Trump's Drug Price Cut: Global Implications for Pharma

President Trump announces a significant order to slash U.S. prescription drug prices by up to 80%. While beneficial for American consumers, this MFN policy could pressure global pharmaceutical markets, potentially impacting India's patent laws and drug pricing strategies.

President Donald Trump has revealed an ambitious executive order that seeks to reduce prescription drug prices in the United States by up to 80%, a move set to reverberate across the global pharmaceutical landscape. Named the 'Most Favored Nation' (MFN) pricing rule, the order ensures that the U.S. pays no more than the lowest price charged in other countries, positioning itself as the least expensive nation for drug prices.

While U.S. patients may find some respite in reduced medication costs, pharmaceutical companies will likely strategize to recover lost revenues, possibly targeting countries with lower prices such as India. Global Trade Research Initiative (GTRI) warns that this might lead to intensified pressure on India to amend its patent laws, which could result in higher drug prices.

According to GTRI, if India cedes to demands for stronger patent protections, it risks delaying the availability of generic drugs and inflating pharmaceutical costs. This development follows reports of fluctuation in the Nifty Pharma index, which initially dipped but later stabilized, illustrating the market's skittish response to potential global price recalibrations.

(With inputs from agencies.)