Trump Announces Major Drug Price Cuts; Spotlight Turns to India’s Pharma Industry

Washington, Dec 18: US President Donald Trump has unveiled a sweeping new prescription drug pricing policy aimed at reducing costs for American consumers, placing global pharmaceutical supply chains — including India’s — firmly under international scrutiny.

In a televised address on Wednesday (local time), Trump announced that his administration had secured significant price cuts from major drug manufacturers and foreign governments. The policy, known as the “Most Favoured Nation” model, seeks to benchmark US drug prices against those paid by other countries — a strategy that could redefine the economics of global pharmaceutical markets.

Trump said the initiative marks a turning point in the decades-long struggle to contain rising drug costs in the United States, where consumers have historically paid far more for medicines than those in Europe, Canada, or Asia. “I negotiated directly with the drug companies and foreign nations, which were taking advantage of our country for many decades, to slash prices on drugs and pharmaceuticals by as much as 400, 500, and even 600 per cent,” Trump said.

He called the policy historic, claiming that US drug costs — which have steadily climbed for generations — would now fall at unprecedented rates. “There has never been anything like this in the history of our country,” he said. “Drug prices have only gone up, but now they’ll be going down by numbers never conceived possible.”

The first phase of reductions is expected to take effect in January. Trump said that consumers will be able to access the new pricing information through a federal website named TrumpRx.gov, which he described as a platform to compare medication costs and ensure transparency.

India’s pharmaceutical industry, one of the largest suppliers of generic medicines to the United States, is watching closely. Indian companies play a crucial role in the US drug supply chain — particularly in low-cost, off-patent medications — and any shake-up in pricing rules could influence earnings, margins, and production strategies.

Trump also disclosed that he used trade leverage to push foreign nations to accept cost adjustments that would help lower US drug prices. “I used the threat of tariffs to get foreign countries who would never have done it to pay the cost of this giant dollar reduction,” he said.

This suggests drug pricing may now sit at the intersection of trade policy and healthcare reform, potentially affecting how global pharmaceutical exporters negotiate access to the US market.

Trump also targeted insurance companies in his remarks, accusing them of profiting excessively while ordinary Americans struggled to afford treatment. “These big price cuts will greatly reduce the cost of healthcare,” he said, arguing that reduced drug costs would ease financial pressure on households.

For Indian drugmakers, the structure of the Most Favoured Nation pricing model will be critical. Whether the pressure falls primarily on branded drugs, generics, or both will shape how companies respond. India currently supplies a large proportion of generics to US consumers and has made substantial investments in facilities that meet the regulatory standards of the US Food and Drug Administration.

The announcement brings back an issue Trump raised repeatedly during his first term, when he claimed that Americans were effectively subsidising low drug prices abroad and demanded that pharmaceutical companies charge all nations similar rates.

As Washington moves to reset the rules of healthcare pricing, India’s pharmaceutical sector faces a complex landscape: the opportunity to remain a major force in supplying affordable medicine, and the challenge of maintaining profitability under mounting global pricing pressure.