Trump’s Drug Pricing Order May Spark Global Price Hike Pressure on India

US President Donald Trump’s new executive order on drug pricing is causing ripples across the global pharmaceutical industry, with fears mounting that India and other low-cost drug markets could face pressure to raise prices. The order introduces a “most favored nation” (MFN) policy, which mandates that the US pays no more than the lowest price for drugs paid by any country worldwide.

“Prescription drug and pharmaceutical prices will be reduced, almost immediately, by 30 to 80 per cent,” Trump said in a social media post, emphasizing fairness for American consumers.

While the move could offer immediate price relief in the US, trade experts warn it may lead to a global price recalibration. Pharmaceutical giants may now push countries like India—key suppliers of affordable generics—to hike prices, as their pricing could impact US benchmarks.

Ajay Srivastava of the Global Trade and Research Initiative (GTRI) called it a “wake-up call,” warning that global drug firms may intensify demands for “TRIPS-plus” intellectual property protections through free trade agreements. He urged India to stand firm on its existing patent regime, which enables affordable medicine and public health safeguards.

Picture Credit: freespeech.org

India's generic industry, already a target of developed nations, may escape direct impact for now. An Indian pharma executive noted the MFN policy might instead pressure US distributors, who capture significant margins. “If Trump wants to lower real prices, he must address this supply chain lobby,” the executive said.

Currently, generics make up only 21% of the US market, while the bulk is in patented drugs. Still, the market reaction was swift—pharma stocks fell globally, including in India, amid fears of declining profit margins if the pricing shift reshapes trade dynamics and investor expectations.