US Prescription Drug Pricing Reforms: Impact on Indian Generics

The US government's new policy to cut prescription drug prices is unlikely to affect Indian generic drug makers due to their existing thin margins. However, it may impact innovator drug companies and could drive a global price change, potentially raising drug costs in lower-cost countries, including India.

The United States has announced a policy requiring companies to lower prescription drug prices within a 30-day timeframe. According to industry experts, this move is expected to impact innovator drug firms rather than Indian generic drugmakers, who operate on thin margins.

The generics industry plays a crucial role in maintaining affordability and accessibility to medicines, as highlighted by Sudarshan Jain, Secretary General of the Indian Pharmaceutical Alliance (IPA). He explained that the generics sector constitutes 90% of US prescription volumes but only 13% of market value.

While India's generic industry appears insulated from immediate impact, the executive order could lead to global price adjustments. Economic analysts believe that pharma companies might increase prices in countries like India to offset losses from developed markets. India's pharmaceutical regulations comply with international standards but resist further patent protections often pressured by developed nations.

(With inputs from agencies.)