New US policy may trigger pharmaceutical repricing worldwide, says think tank
New Delhi, May 12 – US President Donald Trump’s impending executive order to slash prescription drug prices by 30 to 80 per cent could set off a global chain reaction, forcing pharmaceutical companies to raise prices in lower-cost countries like India, warns the Global Trade Research Initiative (GTRI).According to GTRI founder Ajay Srivastava, this aggressive move by the US may push global pharma giants to recalibrate prices internationally to compensate for tighter profit margins in high-income markets. “It is likely to trigger a global price recalibration, with pharmaceutical giants intensifying pressure on lower-cost markets like India to raise their prices by tightening patent laws through trade negotiations,” Srivastava stated.
India's Patent Regime in the Crosshairs
Srivastava emphasized that Trump's most-favoured nation (MFN) pricing policy marks a pivotal shift. As pharmaceutical firms face price controls in Western countries, they are expected to escalate lobbying for stronger patent protection in developing nations.“The battleground is no longer just legal; it has moved to trade negotiations. India must respond with strategic clarity and unyielding resolve,” he asserted.
India has traditionally resisted adopting TRIPS-plus provisions — extended intellectual property protections not mandated by the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). These include practices like data exclusivity, automatic patent term extensions, patent linkage, and broader patentability norms, which can delay the entry of generics.
Instead, India's patent laws allow regulatory bodies to use existing clinical trial data to approve generic drugs, enabling faster and more affordable access to essential medicines.
Safeguarding Global Access to Generics
The GTRI noted that India’s pharmaceutical model, which rejects patent evergreening and protects traditional knowledge, plays a crucial role in ensuring affordable healthcare globally. “From antiretrovirals for HIV to affordable cancer therapies, India’s pharmaceutical industry is vital to global health,” it said.India’s ability to produce low-cost generic medicines not only benefits its own population but also supports healthcare systems in several developing countries. “The world depends on India’s generics. Preserving this model is not only in India’s interest – it is a moral and global necessity,” the think tank added.
Experts Warn of Ripple Effect
Echoing similar concerns, Saurabh Agarwal, Tax Partner at EY, said that while the proposed US policy could bring substantial savings for American consumers, it might also provoke price hikes in emerging markets. “Manufacturers could offset the US losses by increasing prices in countries like India,” Agarwal noted.As the global pharmaceutical industry braces for a potential overhaul, experts urge India to defend its patent policies in upcoming free trade agreement (FTA) negotiations and resist any dilution of its pro-access stance.