US MFN Drug Pricing Unlikely to Immediately Affect Indian Pharma

The Most Favoured Nation (MFN) drug pricing policy proposed in the United States is not expected to have an immediate impact on Indian pharmaceutical companies, according to industry analysts and market experts. The policy seeks to align US prescription drug prices with the lowest prices paid by other developed economies, with a focus on reducing healthcare costs for public insurance programmes.

The MFN framework is primarily aimed at high-cost, patented medicines, particularly those sold under government-backed schemes such as Medicare and Medicaid. Indian pharmaceutical companies, however, derive the bulk of their US revenues from generic drugs, which are already priced significantly lower than branded products. As a result, direct exposure to MFN-linked pricing controls remains limited in the near term.

India is a major supplier of affordable generic medicines to the US, and this segment continues to be driven by volume rather than pricing power. Analysts note that since generics already operate on thin margins and competitive pricing, the MFN mechanism does not materially alter current business conditions for most Indian exporters.

That said, experts caution that longer-term implications cannot be ruled out. If the MFN policy leads to a broader restructuring of global drug pricing benchmarks, reference pricing in other regulated markets could also shift. Such changes may gradually influence procurement policies, reimbursement norms, and negotiations with buyers across multiple geographies.

There is also a possibility of indirect pressure if multinational innovators respond by adjusting launch prices, supply strategies, or market access models, which could affect the competitive landscape over time. However, these developments are expected to unfold gradually rather than cause immediate disruption.

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Overall, credit rating agencies and industry bodies maintain that the diversified product portfolios, strong regulatory compliance, and scale advantages of Indian pharma companies provide a buffer against short-term shocks. While companies will continue to monitor policy developments closely, the current consensus is that MFN drug pricing does not pose an immediate risk to India’s pharmaceutical exports to the US