US President Donald Trump Takes Aim at High Drug Prices

In a significant move to combat "price-gouging and profiteering" by Big Pharma, US President Donald Trump signed an executive order aimed at drastically reducing prescription drug prices. The initiative seeks to align US prices with those paid by other developed nations, potentially cutting costs by 59% to 90% for certain drugs.

India's Pharmaceutical Sector Stands Strong

Despite the sweeping changes, India's pharmaceutical sector, which exports around $9 billion worth of drugs and fulfills about 35% of US prescriptions with affordable generics, remains shielded. Indian generics are already competitively priced due to market pressures and cost efficiencies, aligning with the US's accessible healthcare goals.

Market Reactions and Future Challenges

The announcement led to initial declines in domestic pharma stocks, with Sun Pharma falling over 3%. However, the sector showed resilience with a recovery by the close of trade. The policy, reminiscent of one proposed during Trump's first term, faces potential legal challenges from Big Pharma and logistical hurdles like drug shortages.

Citing the price differential between the US and Europe, Trump highlighted a weight loss injection priced at $88 in London versus $1,300 in the US. The order directs the administration to negotiate better deals, potentially adopting a "most favoured nation policy" to match the lowest global prices.