India’s $7 billion pharma exports to the US may face a major setback as President Donald Trump is set to sign an executive order aimed at slashing prescription drug prices in the United States by up to 80%.
In a post on the social media platform Truth Social, Trump said: “For many years, the world has wondered why prescription drugs and pharmaceuticals in the United States of America were so much higher in price than they were in many other nations…”
While Trump said there are no correct or rightful answers to this question, he promised that prescription drug and pharmaceutical prices would be reduced by 30% to 80%. “They will rise throughout the world in order to equalize and, for the first time in many years, bring fairness to America. I will be instituting a Most Favoured Nation (MFN) policy whereby the United States will pay the same price as the nation that pays the lowest price anywhere in the world,” he said.
Experts believe this move could prompt a global realignment of drug pricing, as major pharmaceutical companies come under pressure to compensate for reduced margins in the U.S. by pushing for higher prices in traditionally low-cost markets such as India. This may be done through renewed demands for stricter patent regimes in trade negotiations.
India has long resisted adopting additional patent protections often advocated by developed nations in Free Trade Agreements (FTAs). These measures include data exclusivity, automatic patent term extensions, patent linkage, and broader patentability rules that support evergreening practices.
But things may change now. “Trump’s MFN pricing policy should be a wake-up call. As pharmaceutical companies face tighter price controls in the West, they will redouble their efforts to raise prices in markets like India. The battleground is no longer just legal—it has moved to trade negotiations. India must respond with strategic clarity and unyielding resolve,” says Ajay Srivastava, Founder of the Global Trade Research Initiative (GTRI), an international trade think tank.
Trump’s announcement resulted in Indian pharma stocks taking a beating on Monday. Most pharma manufacturers’ shares fell by over 1% by Monday noon, with Sun Pharma shares declining by almost 3%.
