Patent reforms, cheaper drugs for US in trade talks

Delhi dangles cheaper generics, seeks manufacturing incentives for US plants

- Priyanka Sharma & Dhirendra Kumar

As the trade deal negotiations between India and the US nears finalization, the pharmaceutical sector is at the heart of a significant give-and-take between the two countries.

According to two people familiar with the matter, India's proposals include supply of low-cost complex generic medicines at sharply reduced costs, patent reforms to allow earlier entry of generics in the US, increased US-based manufacturing by Indian pharma firms of active pharmaceutical ingredients (APIs) and fixed dosage forms (FDFs), and tariff exemptions for life-saving and critical medicines imported into India from the US.

An API is the main component of a drug (think paracetamol), while an FDF is a combination of two or more APIs in a single drug, such as a tablet that contains both paracetamol and ibuprofen.

India's offer comes in the backdrop of the US administration's stated desire to sharply reduce local drug prices, and gains significance considering every second prescription in the US has a generic drug made by an Indian company.

Amid the US push to bring pharmaceuticals under its reciprocal tariff regime, India has proposed to supply complex generic medicines at 20-25% of current branded prices for the first three years after patent expiry. An additional 10-15% cost reduction will follow over the following seven years, the people cited above said on the condition of anonymity.