New Delhi: According to an HDFC Securities analysis, Indian generic pharmaceutical companies are unlikely to be impacted by US President Donald Trump's new order to bring prescription drug prices in line with those in other developed countries.
According to the study, the purchase attempts to cut the cost of prescription drugs in the United States by comparing them to the costs paid by other developed nations.
It said, "In our view, the generic firms are unlikely to have any impact. "
This executive order implements the Most Favored Nation (MFN) pricing model. Under this strategy, the United States will not pay more for medications than the lowest price paid by other industrialized countries.
This pricing plan was previously just applicable to Medicare in 2020. It has now been broadened to include both Medicare and Medicaid.
The action comes after Trump stated that the government seeks to reduce the cost of prescription medications by 30-80%. This declaration was made after the US Department of Health and Human Services (HHS) released a study in February 2024, which found that medication prices in the United States were substantially higher than those in other countries.
According to the study, the average medicine price in the United States was 277 percent of the global average.
For branded drugs, the gap was much greater, with US prices 422% higher than other countries and the top 60 brands 504% more expensive. In contrast, generic medicine prices in the United States were just 67% of those in other affluent nations.
Despite this, many aspects of the strategy remain unclear, with the report noting that it is still unknown which medicines, enterprises, or nations would be included under the MFN model. Officials are expected to notify pharmaceutical firms about the target MFN rates in the next 30 days.
The executive order also intends to circumvent pharmacy benefit managers (PBMs) by enabling American patients to get medicines directly from manufacturers at MFN rates.
Other sections provide considerable discounts for low-income patients on life-saving medicines, as well as import programs and measures to improve the availability of generic and biosimilar medications.
However, the report also stated that the executive order is expected to encounter legal obstacles. A similar MFN restriction that was implemented in 202021 was struck down by the courts. Nonetheless, the research indicates that generic pharmaceutical businesses are unlikely to be affected by this regulation.
