Boon or a bane: What does Trump’s latest proposal to import cheaper drugs mean for Indian pharma companies?

• Business Insider reached out to several experts to understand the impact of Trump’s new proposal to import cheaper drugs from other countries.
• Some experts see this order providing good news for the Indian pharmaceutical companies; adding that it could help increase their global presence.
  
• On the other hand, some experts believe that Trump’s plan to cut prescription drug prices could negatively impact Indian pharmaceutical companies and may limit the opportunities ahead.

US President Donald Trump, on July 25, proposed four orders that would allow the American government Singhto import cheaper drugs from abroad and provide it to American citizens at a lower price. While the move benefits American citizens, it also has a direct impact on the pharmaceutical industries of countries like Canada, China, and India. Previously, in 2018, Indian firms accounted for 35-40% of the global USFDA 971 approval, according to Global Business Reports.

So what does this move mean for Indian pharmaceutical companies? Business Insider reached out to several experts to understand the impact of Trump’s new proposal to import cheaper drugs from other countries.

Impact on Indian pharma companies
According to Shailesh Shah, Senior Partner, and founder at Strta Consulting, the proposed order can be a piece of good news for the Indian pharmaceutical companies.

“If the orders do pass, it will be a boom time for countries that are exporting lower cost patent expired copies to America. Irrespective of circumstances, their repurposed uses would increase. Their sales would go up.” Shah told Business Insider India.

The proposed orders are also likely to increase the presence of Indian pharmaceutical industry globally, believes Dr. Shuchin Bajaj, Founder Director, Ujala Cygnus Healthcare Services.

Should Indian pharma companies be worried?

On the other hand, some experts believe these orders might have a negative impact and may limit the opportunities for Indian pharmaceutical companies.

“The impact of Donald Trump’s executive orders on Indian drug companies will be either neutral or negative. While the order related to the passing through of the rebates to patients will primarily impact the middlemen, the order which states that the US drug prices should be based on international pricing could negatively impact companies that sell speciality drugs and biosimilars,”Mahesh Singhi, Managing Director and Founder of Singhi Advisors told Business Insider India.

Mr. Arvind Sharma, Partner, Shardul Amarchand Mangaldas & Co believes these orders, if passed, might hamper the series of measures taken by the Indian government to strengthen the pharmaceutical sector.

“It may be noted that the government has taken a series of measures to strengthen the pharma sector, including introducing the concept of pharma parks where investments will be made in common infrastructure and providing production incentives. Such measures have been introduced with a view to make the Indian pharma sector self-sufficient and encash on the global opportunity for this sector. The aforesaid orders make the situation complex and limit the opportunity for the pharma sector”.

It is still too soon to determine the impact of the proposal

“We need to wait for more specifics on the drugs covered etc but it's probably unlikely to impact the Indian pharma exporters much, since there has already been significant price erosion in the last three years,” Ms. Charu Sehgal, Partner and Leader, Life Sciences and Healthcare, Deloitte India

Moreover, this news comes at a time when Donald Trump is facing re-election in the next few months, and this makes the execution of these orders a bit challenging.

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