US MFN drug pricing may not have immediate impact on Indian pharma firms

Analysts say the US move to link drug prices to the lowest global benchmarks targets patented medicines, limiting near-term risks for India's largely generic-focused exporters

US President Donald Trump’s move to lower prescription drug prices for Americans, in line with the lowest prices paid by other developed nations, is unlikely to have an immediate impact on Indian drugmakers, according to analysts and experts.

 

This comes after President Trump unveiled his Most Favored Nation (MFN) pricing deals on Friday, with nine pharmaceutical companies, including GSK, Merck, Novartis and Sanofi.

 

Analysts said that the MFN policy, primarily aimed at patented drugs, may not affect India as it usually plays a major role in supply of generic medications.

 

India is the US’ biggest generic supplier, catering to around 40 per cent of the latter's generic drugs market.

 

The US is the largest export market for Indian pharmaceutical companies at $10.52 billion, accounting for 34.6 per cent of the country’s overall pharma exports worth $30.38 billion in financial year 2025 (FY25).

 

However, changes in global pricing benchmarks due to MFN pricing could indirectly affect Indian generic manufacturers.

 

“If reference prices in Low and Middle Income Countries (LMIC) rise due to US pressure, Indian exporters may face increased competition or reduced margins in those markets,” a pharma company executive said on the condition of anonymity.

 

Other implications include drugmakers delaying launching new drugs in lower-cost-markets, or introducing new drugs at higher prices, even in developing countries, to keep the prices elevated in the US.

 

Analysts also believe that drugmakers like Sun Pharma may see an impact on their specialty drug portfolio in the US.

 

Sun Pharma’s improving product mix can partially offset the effects of higher operating costs and tax rate, Nuvama said in a report in May. “However, the uncertainty on potential tariffs and pricing reset as per MFN pricing may lead to future earnings cuts,” it had said. The firm’s US sales in the first half of FY26 stood at ₹8,216 crore, according to its investor presentation.

 

Sun Pharma could not be immediately reached for a comment.

 

Trump had issued an executive order on May 12 this year, seeking to establish a mechanism, through which, American patients could buy drugs directly from manufacturers selling to Americans, at an MFN price. This would bypass middlemen.

 

Since September 30, Trump has announced 14 deals with major pharmaceutical manufacturers

 

The agreements claim to reduce prices on drugs that treat numerous costly and chronic conditions such as type-II diabetes, chronic obstructive pulmonary disease (COPD), Hepatitis B and C, HIV and certain cancers among others.