US drug order to hit India pharma R&D

Innovator firms might lower their research budgets, impacting Indian CROs that rely on their outsourced projects

- Jessica Jani

Indian pharmaceutical companies that provide research services could take a hit following US President Donald Trump's executive order on cutting prices of prescription drugs, analysts told Mint.

The order, which seeks a policy for the US to pay 'most-favoured-nation' price—lowest paid by comparable countries for certain drugs—may affect innovator companies more than generic drugmakers. Consequently, innovators may have to cut spending on research to reduce costs, analysts said.

"If you look at a contract research organisations... they would be impacted first. Because if you're cutting the prices by 30 to 80% for innovators, there's less incentive for them to put in most of the capex on these high-end products," said Tausif Shaikh, lead pharma analyst, BNP Paribas.