New Delhi: Indian drug makers, who earn almost 50% of their revenues from the American market, are keeping their fingers crossed after US President Donald Trump told multinational drug makers that they were charging “astronomical” prices. At a White House meeting on Tuesday , Trump met senior management representatives from leading multinational pharmaceutical companies including Merck CEO Ken Frazier, Eli Lilly CEO Dave Ricks, Celgene CEO Bob Hugin and Pharmaceutical Research and Manufacturers of America CEO Stephen Ubl.
“You folks have done a very great job over the years but we have to get the prices down,” Trump told the CEOs.He has also threatened to have the government directly negotiate prices with the industry in order to get better bargains and steeper international competition to lower prices.Though Indian pharmaceutical industry , supplying lowcost generic medicines worldwide, see Trump’s bashing of American Big Pharma industry as an opportunity for the domestic industry here, it is also cautious due to possibility of pricing pressure in their most profitable market.
Moreover, Indian companies may also face restrictions and higher import taxes as the US is set to promote indigenous manufacturing.
“However, Indian companies are unlikely to be significantly impacted because our prices are already very low and it will be difficult for Ame rican companies to compete with that,” said Pankaj Patel, CMD of Cadila Healthcare Indian drug makers say the move by the US President is targeted at the US companies selling drugs at exorbitant prices, while manufacturing them outside the US at much cheaper cost. “Trump wants American companies to make their products in the US or at least pass on cost benefits to consumers. The objective here is to contain healthcare expenditure . So far, he has not talked about generics. Hence, we are not unduly concerned,” said D G Shah, secretary general, Indian Pharmaceutical Alliance.
Though Indian companies are cautious, given a major chunk of their export revenue comes from the US, they also see Trump’s advisory as an opportunity for low-cost generic drugs. “If MNCs have to bring their production back to the US, it will be difficult for them to match Indian prices,” said a senior executive from another major Indian pharma company . Experts said although domestic companies may not be impacted directly , they can expect pricing pressure to intensify . India contributes around 30% of the overall volume of drugs consumed in US.
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Kiran Mazumdar Shaw, CMD, Biocon had told TOI: “The Indian generic pharma industry has been addressing the need for affordable pharmaceuticals of the US patients for decades and has enabled the US government to bring down its healthcare spends. In that sense, I believe Indian Pharma is aligned with Trump’s vision of containing healthcare costs, and therefore will not be impacted much with his anticipated policy changes. I think he will be focusing on introducing new pricing models that will make expensive innovator drugs more affordable, considering that the generics are priced at almost one-tenth of the branded drugs”.