US President Donald Trump’s executive order to lower prescription drug prices by benchmarking them against rates in countries like the UK and Germany is sending shockwaves through multinational pharmaceutical giants. However, according to Kiran Mazumdar-Shaw, Executive Chairperson of Biocon, the move is unlikely to harm India’s generic drug exporters. Instead, it may unlock new opportunities for India in areas like contract research and biosimilars.
Mazumdar-Shaw emphasizes that the policy primarily targets Big Pharma’s pricing strategies, which often see US consumers paying significantly more for the same medications available in Europe. “It’s not about generics or biosimilars,” she clarified in an interview with Business Today. She described the executive order as a “targeted attempt” to fix global price distortions caused by large multinational drugmakers.
The order introduces international reference pricing for select high-cost drugs and forms part of the Trump administration’s broader plan to curb soaring healthcare costs — an issue gaining traction ahead of the US presidential election. While concerns linger about potential tariffs on Indian pharmaceutical products amid evolving US-India trade talks, Mazumdar-Shaw played down their impact. She noted that even if tariffs in the range of 2.5% to 10% are introduced, they are unlikely to derail Indian pharma’s global competitiveness. “Our sector is resilient and has faced far bigger challenges,” she said, pointing to economies of scale as a key buffer.
India’s pharmaceutical exports remain robust, growing by 9.67% year-on-year to $27.9 billion in FY24, up from $25.4 billion the previous year, as per commerce ministry data. The US continues to be the largest importer, accounting for over 31% of these exports. Pharmexcil, the Pharmaceuticals Export Promotion Council of India, projects further growth, expecting exports to rise over 11% to touch $31 billion in FY25, buoyed by demand from the US, UK, and a revival in African markets.
India’s pharma industry, already the third largest globally by volume and 13th by value, manufactures over 60,000 generic drugs across 60 therapeutic areas. The sector is forecasted to reach a value of around $130 billion by 2030.
Mazumdar-Shaw also noted another US policy reform that could play to India’s advantage — the move to curtail the role of Pharmacy Benefit Managers (PBMs). These intermediaries have long been criticized for inflating drug prices without adding real value. “Eliminating middlemen can directly ease costs for consumers,” she said.
When asked about the US push to boost domestic drug manufacturing as a way to offset reliance on foreign supply chains, Mazumdar-Shaw expressed skepticism. She argued that despite the political appeal, moving production to the US would increase costs and undermine the very pricing benefits being pursued.
A more consequential effect of the US’s price equalization efforts, she believes, could be a reduction in R&D investment by large pharmaceutical firms. To maintain profitability, these companies may increasingly outsource to low-cost, high-quality destinations like India. “If Big Pharma cuts back on internal R&D to save costs, they will look to countries like India for more affordable contract research services,” she explained, citing Biocon’s own subsidiary, Syngene, as a key player in India’s $20 billion CRAMS (Contract Research and Manufacturing Services) market.
Moreover, as global healthcare systems shift focus to affordability, biosimilars are gaining traction as cost-effective alternatives to biologics. Indian companies such as Biocon Biologics, Dr. Reddy’s, and Lupin are well-positioned, with USFDA-approved biosimilars in areas like oncology, diabetes, and immunology.
Mazumdar-Shaw remains optimistic that the evolving US pharmaceutical landscape will not derail India’s pharma momentum. With a strong presence across both developed and emerging markets, India’s pharmaceutical industry, she believes, is prepared to navigate and thrive amid global shifts. “There’s no need for a knee-jerk reaction,” she concluded. “Indian pharma can manage.”
