Trump’s Drug Pricing Push May Backfire Abroad, Sending India’s Medicine Costs Soaring

While American consumers may get some breathing room, India’s pharmaceutical industry braces for a pricing shake-up that could ripple across healthcare systems globally.

Former U.S. President Donald Trump’s renewed push to slash domestic drug prices has reignited a complex debate — and its effects could stretch far beyond American borders. In trying to rein in Big Pharma at home, Trump might have unintentionally set the stage for rising costs in countries like India, where millions depend on affordable medication.

The short-term political win for Trump could end up being a long-term economic blow for global health, especially in developing markets. India, a top supplier of generic medicines worldwide, now finds itself caught between tightening margins and soaring expectations.

Pharma Giants May Squeeze India to Compensate

Trump’s proposed plan focuses on forcing U.S. drugmakers to sell medicines to Americans at prices comparable to international markets — a strategy dubbed “reference pricing.” That sounds like a win for U.S. patients. But the ripple effect? Not so simple.

Pharma companies aren’t charities. If they’re forced to sell cheaper in the U.S., they’ll likely try to recoup that lost revenue elsewhere. And that “elsewhere” could very well be India.

A senior executive at a top Indian pharma firm, who requested anonymity, said, “We’re already operating on razor-thin margins. If the U.S. puts more price controls in place, pressure will shift to markets like ours.”

For Big Pharma, India has long been a volume game. It’s one of the few places where profits come from scale, not high per-unit prices.

But that dynamic is at risk of changing. And fast.

Why India Has Been Paying Less (So Far)

There’s a reason Indian consumers haven’t had to pay American-level prices for drugs. Generic medicine production in India is cost-efficient. Low labor costs, bulk raw material procurement, and government-imposed price caps have kept prices down.

The National Pharmaceutical Pricing Authority (NPPA) regulates thousands of drugs under price control. That’s what has helped keep the Indian market accessible to the average citizen.

But what happens if foreign pharma firms begin demanding higher compensation? Or worse, limit exports?

• India imported over 60% of its active pharmaceutical ingredients (APIs) from China as of 2023. If multinationals manipulate upstream prices or supplies, it could choke local production.

That’s a dangerous possibility, especially given how fragile global supply chains already are.

A Peek Into the Numbers: U.S. vs India Pricing

Here’s a quick look at how drug prices stack up across the two nations:

One glance tells the story. Prices in India are just a tiny fraction of what Americans pay. But if Trump’s reference pricing plan goes through, pharma giants will need to bridge the revenue gap somehow.

And India looks like an easy target.

Local Pharma Companies Caught in the Crossfire

Indian pharma firms, already navigating a tough regulatory and competitive landscape, could take a direct hit.

Two things are happening here. First, global brands might hike licensing fees or product prices sold in India. Second, Indian manufacturers selling in the U.S. could face reduced margins as their American clients drive harder bargains.

Companies like Sun Pharma, Cipla, and Dr. Reddy’s are already walking a tightrope between regulatory compliance and profit sustainability. Add this new pressure, and the situation could worsen.

Some firms might:

• Reduce R&D investment in favor of cost control

• Cut back on drug exports to countries with rigid price controls

• Pass costs on to consumers by quietly withdrawing cheaper generics

It’s a slippery slope that could see the middle- and lower-income Indian population footing the bill.

Government’s Dilemma: Protect Consumers or Please Trade Partners?

On one side, it must defend public access to affordable medication — a political and moral imperative. On the other, there’s mounting pressure from international trade partners and pharma lobbyists.

Health Minister Mansukh Mandaviya hasn’t yet responded directly to Trump’s proposals, but bureaucrats within India’s Commerce Ministry are reportedly reviewing potential fallout on bilateral pharmaceutical trade.

One official candidly admitted, “We don’t want a trade war, but we also won’t abandon our population to high medical costs.”

India may have to rethink its price control policies if external pressure keeps building. That could mean fewer price caps — and more out-of-pocket spending for patients.

Who Gets Hurt the Most?

The biggest losers in all of this? Regular people. Especially those with chronic illnesses who rely on monthly medication to survive.

Take 68-year-old Suraj Sharma, a retired teacher from Lucknow, who spends ₹1,200 every month on diabetes and blood pressure drugs. “If prices double or even rise by 30%, I won’t be able to afford my treatment,” he says. “Do they even think about people like us?”

It’s a sobering reality. One policy shift thousands of miles away, and millions could be priced out of essential care.

India’s private healthcare system already suffers from stark inequalities. The public sector, though improving, still isn’t equipped to handle mass migration of patients pushed out by rising drug costs.

For now, Indian consumers are still insulated. But how long that insulation holds — that’s anybody’s guess.