- By Supratik Das
- Mon, 12 May 2025 09:54 AM (IST)
- Source:JND
US President Donald Trump has announced that he will sign one of the most consequential Executive Orders in American history on Monday. Orders aimed at slashing drug and pharmaceutical prices across the United States by 30 to 80 per cent. The statement, released through a detailed post on Trump's social media site Truth Social, introduces a broad new policy named the Most Favored Nation's policy, one that aims to make American consumers more equitable by having the US pay no more for medication than the lowest cost anywhere globally. “Our country will finally be treated fairly, and our citizens’ healthcare costs will be reduced by numbers never even thought of before,” Trump stated.
Trump Criticises Pharma Firms
Writing on his Truth Social post, Trump targeted pharmaceutical giants and political rivals, saying Americans have been paying too much for the same medicines being sold at lower prices around the globe. He stated the pharma sector would often point towards research and development expenses as an excuse, benefiting in the process at the expense of American consumers. “The pharmaceutical companies would say, for years, that it was research and development costs… all of these costs were, and would be, for no reason whatsoever, borne by the ‘suckers’ of America, alone,” Trump wrote. He added that pharma company contributions to campaigns kept things this way, something that he says will now cease under his administration or the Republican Party.
Monday's executive move follows a parallel order signed by Trump in April 2025, which regulated Medicare payments for medicines across all treatment centers. That order was estimated to lower some prices, like cancer treatment medicines, by as much as 60 per cent. A White House fact sheet then reported that the April order also provided for decreasing the cost of insulin to poor and uninsured patients to as little as 3 cents, and injectable epinephrine to as little as 15 USD with a small administrative charge. The administration also supported measures that made it easier for states to run importation programs for less expensive drugs and to enhance access to low-cost sickle-cell treatment through Medicaid.
Prescription drug prices rose more than 15 per cent between January 2022 and January 2023, with the average cost reaching 590 USD per drug product, the US Department of Health and Human Services said. The sharp upsurge has put pressure on American families and has called for sweeping reform in the pharmaceutical industry.
Impact On Indian Pharma Industry
Trump's suggested Most Favoured Nation's Policy can have far-reaching consequences for Indian drug exporters, who are among the largest generic drug suppliers to the US market. Industry experts opine that if the US imposes price parity according to the lowest global prices, Indian drug companies might have to lower their prices, affecting their margins. Also, any increase in global drug prices upwards—towards US costs could impact affordability in developing nations. But Indian companies, which are known for low-cost production, could gain in the long term by having a competitive advantage over more expensive Western producers in the global pricing scenario.