On Wednesday, during Donald Trump's first news conference in a while, the incoming US President targeted the international pharma industry, with specific attention given to pharma imports into the US. "We’ve got to get our drug industry back," he said during the conference, "Our drug industry has been disastrous..they supply our drugs, but they don’t make them here, to a large extent."
Most drug imports in the US are for low-cost generic drugs, and three-fifths of such drugs are from India. The leaders in exporting pharmaceuticals in key categories - for seizures, cardiac disease, and diabetes - to the United States are three Indian companies: Dr. Reddy’s Laboratories, Aurobindo Pharma, and Cipla.
Trump has already made it clear that he is going to act against the IT service model of core Indian firms such as Infosys and TCS. By promising tightening or an outright ban on H1B visas, as well as tariffs on outsourcing, he has clouded the outlook for these IT firms, as they prepare for immediate executive actions once he takes office. 'Bringing jobs back' has been a key refrain of Trump during the election, and it remains to be seen how much this talk will translate into serious curbs agains Indian IT, and now generic Indian pharma.
What might limit the Trump administration is however, cost. The cost of medication in the US has spiralled up in the last decade - in 2015 list prices of drugs increased by over 12% in the US according to the IMS, a trend that includes various life-saving drugs. Much of the exports to the US from Indian companies are generics which provide competition to brand-name drugs in the United States and keep costs low for critical medication. About 30% of all USFDA-approved drugs now belong to India generic companies. Trade curbs is near-certain to bring up the cost of medication for Americans.
