Indian generic drug players unlikely to be affected by Trump attacks

Generic drug industry in India which supplies to the US is unlikely to be affected: Pankaj Patel

The Indian pharma industry, which account for nearly 40 per cent of the generic drugs in the US, is unlikely to come under pressure after US President-elect Donald Trump attacked the pharmaceutical industry for high drug prices and overseas manufacturing, felt industry here. 

Speaking at the sidelines of the Vibrant Gujarat Global Summit, Pankaj Patel, chairman of Federation of Indian Chambers of Commerce and Industry (FICCI) and also chairman and managing director of Cadila Healthcare Ltd said that generic drug industry in India which supplies to the US is unlikely to be affected. His own firm draws around 35-40 per cent of its revenues from the US markets. 

He explained that the generic drug industry in India, in fact, has saved revenues to the tune of $40 billion dollar by supplying cheaper yet quality drugs to the US last year.

Shares of Indian pharma companies, however, fell on Thursday with companies like Aurobindo Pharma, Cadila Healthcare, Dr. Reddy’s Laboratories, Lupin Ltd, Cipla etc witnessing a fall in the range of 1-2 per cent on the Bombay Stock Exchange (BSE). 

As such generic drug companies are already under pricing pressure in the US thanks to rising competition as well as price erosion of 8-9 per cent in base business. However, analysts too felt that while there would be some short term pressure on the industry as a whole, there is hardly any incremental risk. 

G N Singh, Drug Controller General of India (DCGI) also said that Indian pharma companies are known for supplying quality generic drugs to the US as reasonable prices. He added that there was hardly any incremental risk posed at generic pharma companies exporting to the US.

India is the largest provider of generic drugs globally with the Indian generics accounting for 20 per cent of global exports in terms of volume.

US president-elect Donald Trump on Wednesday attacked the pharmaceutical industry for high drug prices and for manufacturing overseas. He also said that he will create new procedures for bidding on drugs. The US is the largest buyer of drugs in the world, Trump had said adding that it, however, does not bid properly. 

With changes in bidding procedures, Trump feels that the US would be able to save billions of dollars.