Archana Shukla and Nikhil Inamdar
BBC News, Mumbai
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Millions of Americans could see the cost of medication escape if Trump imposes prices on Indian drugs
With Donald Trump’s prices in Tit-For-Tat on India which is looming next month, millions of Americans may have to prepare higher medical bills.
Last week, the Indian Minister of Commerce, Piyush Goyal, made an unforeseen trip to the United States for discussions with officials, in the hope of concluding a trade agreement.
He followed Trump’s announcement that he would impose prices – which are government taxes on foreign imports – to India by April 2, in retaliation for India prices on American products.
Goyal wants to avoid tax increases on the critical export industries of India as well as drugs.
Almost half of all brand-free drugs taken in the United States come from India only. Generic drugs – which are cheaper versions of brand medicines – imported from countries like India represent nine out of 10 prescriptions in the United States.
This saves billions of dollars in health costs. In 2022, the savings of the Indian generics amounted to $ 219 billion (169 billion pounds sterling), according to a study by the consulting firm Iqvia.
Without a trade agreement, Trump’s prices could make certain Indian generics non -viable, forcing companies to leave part of the market and to exacerbate the shortages of existing drugs, according to experts.
The prices could “aggravate imbalances in the supply of demand” and the uninsured and the poor will be left into account of the costs, explains Dr. Melissa Barber, an expert in drug addiction from the University of Yale.
The effects could be felt by people with a range of health problems.
According to the IQVIA study, more than 60% of the prescriptions of hypertension and mental health prescriptions in the United States have been filled with Indian drugs (IPA).
Setraline, the most prescribed antidepressant in the United States, is an important example of how dependent Americans are Indian supplies for essential drugs.
Many of them cost half as much as for those of non -Indian companies.
“We are worried about it,” said Peter Maybarduk, a lawyer at Public Citizens, a consumer defense group fighting for drug access. One in four American patients fails to take medication because of their costs, he adds.
Trump has already faced the pressure of American hospitals and generic drug manufacturers because of his prices on Chinese imports.
The raw materials of 87% of the drugs sold in the United States are located outside the country and are mainly concentrated in China which fills around 40% of the world supply.
The prices on Chinese imports increasing by 20% since Trump took up his duties, the cost of raw materials for drugs has already increased.
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In the United States, around 60% of hypertension and mental health requirements are filled with Indian manufacturing drugs
Trump wants companies to move manufacturing in the United States to avoid its prices.
The big pharmaceutical giants like Pfizer and Eli Lily, who sell from the brand and patented drugs, said that they are committed to moving a certain manufacture there.
But the economy of low -value drugs does not add up.
Dilip Shanghvi, president of the largest medication manufacturer in India, Sun Pharma, told industry rally last week that his business sells pills between $ 1 and $ 5 per bottle in the United States and that prices “do not justify moving our manufacturing in the United States”.
“Manufacturing in India is at least three to four times cheaper than in the United States,” said Sudarshan Jain of the IPA.
Any quick relocation will be almost impossible. The construction of a new manufacturing plant can cost up to $ 2 billion and take five to 10 years before being operational, according to the Lobbys PHRMA group.
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With the prices of Donald Trump, Indian Minister of Commerce, Piyush Goyal, made an unforeseen trip to the United States last week
For local pharmaceutical players in India, the price blow could also be brutal.
The pharmaceutical sector is the largest industrial export in India according to GTRI, a commercial research agency.
India exports about $ 12.7 billion in medication in the United States each year, paying almost no tax. American drugs coming to India pay 10.91% of rights, however.
This leaves a “commercial differential” of 10.9%. All of the United States reciprocal prices would increase costs for generic drugs and specialized drugs, according to GTRI.
It reports pharmaceutical products as one of the sectors that is most vulnerable to price increases on the American market.
Indian companies that largely sell generic drugs already work on thin margins and will not be able to afford a high tax spell.
They sell at much lower prices compared to competing peers and have constantly acquired a domination over cardiovascular drugs, mental health, dermatology and women’s health on the largest pharmaceutical market in the world.
“We can compensate for price hikes with a figure with cost reductions, but everything that will also be will have to be transmitted to consumers,” said the financial chief of a better Indian drug manufacturer who did not want to be identified, told the BBC.
North America is their greatest source of income, contributing a third of the profits and profitability of most companies.
“It is the fastest and most crucial market. Even if we increase exposure to other markets, this will not adapt to loss on the American market,” said the finance chief.
Umang Vohra, CEO of the third pharmaceutical company in India, CIPLA, said at a public rally recently that prices should not ultimately dictate what businesses do, “because there is a risk that four years later, these prices can disappear”.
But four years is long and could make or break the fortune of several companies.
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India has agreed to reduce prices “below,” said Donald Trump recently
To avoid all of this, “India should simply lower its prices on pharmaceutical products,” Ajay Bagga told BBC. “US drug exports to India are barely half a billion dollars, so the impact will be negligible.”
The IPA, which is made up of the largest drug manufacturers in India, has also recommended zero duty on exports of American drugs so that India is not affected negatively by reciprocal samples.
The Government of Indian Prime Minister Narendra Modi recently added 36 vital drugs to the list of drugs entirely exempt from a basic customs service in the budget, and President Trump hinted last week that India could yield to his pressure.
India has agreed to reduce the prices “below”, he said, because “someone finally exhibited them for what they did”.
Delhi has not yet answered, but the pharmaceutical players of the two countries are nervous to see the details of a trade agreement which could have an impact on lives and means of subsistence.
“In the short term, there can be a certain pain through new prices, but I think they will make significant progress by the fall of this year for a first tranche agreement (trade),” said Mark Linscott, former assistant representative of the United States, to the BBC, adding that none of the countries could afford to manage in the pharmaceutical supply chains.
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