Trump’s Drug Price Cuts to Have Minimal Impact on Indian Pharma Exports Says Crisil Ratings

The U.S. executive order targeting prescription drug price reductions by 30-80% is unlikely to significantly affect Indian pharmaceutical exports, according to Crisil Ratings. India exports 54% of its pharmaceutical output, with nearly one-third going to the U.S., largely comprising low-cost generics. These generics make up 90% of U.S. prescription drug sales by volume but contribute only 13% to the overall value, leaving little room for further price cuts to impact Indian revenues meaningfully.

The policy focuses on aligning prices of high-margin branded innovator drugs with the Most Favoured Nation (MFN) pricing model, excluding generics and biosimilars. While this shields the majority of Indian exports, Crisil notes that future growth for generic versions of off-patent innovator drugs may face challenges due to reduced price differentials.

Indian API exports, accounting for 15% of pharma exports, are also largely unaffected as they are not significant cost contributors to branded drugs. However, opportunities may arise for contract manufacturing organizations (CMOs), which represent 8% of India’s pharma market, as global companies look to outsource production to reduce costs.