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Trump’s EO on MFN prescription drugs to strengthen adoption of generics & biosimilars
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Nandita Vijayasimha, Bengaluru
May 15 , 2025
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US President Donald Trump's Executive Order on Most Favoured Nation (MFN) prescription pricing aims to reduce prescription drug costs and address the price disparity of innovator drugs between the US and other developed markets like Europe and Australia.
Kiran Mazumdar Shaw, chairperson, Biocon Group, said, “This order does not target generics and biosimilars, which already provides affordable alternatives under the Affordable Care Act (ACA). It does not aim to equalize drug prices with developing economies. India, particularly in generics and biosimilars, is well-positioned to support this shift with its proven capabilities in cost-efficient and high-quality manufacturing.
Companies like Biocon are ready to play a constructive role in this transformation. In fact, the White House Executive Order clearly states, “These actions included encouraging the development of generic and biosimilar alternatives to higher cost brand name prescription drugs and biologics to harness competitive forces and increase access to affordable medicines. The US also, for the first time, established a pathway to expand access to lower cost drugs imported from outside the country.”
“This executive order therefore strengthens the greater adoption of generics and biosimilars. Rationalizing drug pricing has been a key policy objective for President Trump since his last term. His administration recognizes that negotiating drug prices is a more effective strategy to control costs than imposing tariffs on pharmaceutical exports, added the Biocon chief.
According to Harish K Jain, president, Federation of Pharma Entrepreneurs (FOPE) and director, Embiotic Labs, President Trump's move to lower prices is prima facie aimed at expensive innovative and branded drugs. Indian generics exports are unlikely to be affected as of now. India being low cost supplier of generic drugs, has an advantage over others like Ireland.
“We must take advantage of the move and climb the value ladder with our competitive innovation and research. Although more details of the move are yet to emerge but coupled with the fact that Trump administration has earlier threatened to impose tariff like never seen before, we should be cautious and calibrate our strategy wisely. This move by Trump will be helpful and can overcome shortages if NDAs and ANDAs applications are cleared quickly bringing in competition as well as amend the Hatch Waxman Act. Needless to add, compliance needs to be eased to reduce cost and bring competition, all of which will be positive for India,” said Jain.
Manoj Palrecha, president, Karnataka Drugs and Pharmaceutical Manufacturers Association (KDPMA) and managing director, Lake Chemicals noted, “US government is reducing the medicine procurement cost, aligning them closely with prices prevailing in other regulated markets. While such reports suggest that US drug prices are nearly three times higher, this claim may not fully reflect market realities.”
Given the intense competition among global suppliers, particularly Indian pharma is already under pressure to maintain competitive pricing to sustain their market share in the US. Under these circumstances, it is difficult to believe that any manufacturer can afford to supply at unreasonably high prices, he added.
Recently there were several announcements to lower import costs. However, the realistic impact of these initiatives will only become clear in the coming weeks, said Palrecha.
Hari Kiran Chereddi, managing director, HRV Global Life Sciences and CEO, New Horizon Global Pharma, said, President Trump's EO ushers in pricing pressure without visible disruption, leaving room to negotiate. Manufacturers could benefit, while intermediaries like PBMs (Pharmacy Benefit Managers) could see margin erosion. Indian exporters need to closely monitor pending import waivers and international price parity efforts.
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