Trump's Drug Price War: How 'Most Favoured Nation' Policy Targets Indian Pharma

In an address to the nation on Wednesday (local time), Trump said his administration had negotiated sharp reductions in drug prices by directly confronting pharmaceutical companies and foreign governments, using trade pressure to force changes in global pricing.

“I negotiated directly with the drug companies and foreign nations, which were taking advantage of our country for many decades to slash prices on drugs and pharmaceuticals by as much as 400, 500, and even 600 per cent,” Trump said.

He said the policy, known as “Most Favoured Nation,” would reverse decades of rising drug costs in the United States.

“There has never been anything like this in the history of our country,” Trump said, adding that drug prices “have only gone up, but now they’ll be going down by numbers never conceived possible.”

Trump said the first round of price reductions would take effect in January and be available through a new government website, TrumpRx.gov.

Notably, Indian pharmaceutical companies play a central role in supplying low-cost drugs to American consumers and are deeply integrated into US healthcare supply chains.

Trump said he used the “threat of tariffs” to pressure foreign countries to absorb part of the cost of lowering US drug prices.

“I used the threat of tariffs to get foreign countries who would never have done it to pay the cost of this giant dollar reduction,” he said.

The remarks suggest trade tools could be used alongside healthcare policy, potentially reshaping how drug prices are negotiated internationally and how exporters engage with the US market.

Trump also criticised health insurance companies, saying they had become rich on money that “should go directly to the people,” and argued that lower drug prices would sharply reduce healthcare costs for American families.

“These big price cuts will greatly reduce the cost of healthcare,” he said.

For Indian drugmakers, the key question will be how the Most Favoured Nation model is implemented and whether pricing pressure falls primarily on branded drugs, generics, or both.

Indian firms supply a large share of off-patent medicines in the US and have invested heavily in facilities meeting US regulatory standards.

Trump’s renewed push revives an issue he raised repeatedly during his first term, when he argued that Americans were subsidising lower drug prices abroad and called for international price parity.

As Trump moves to reset US healthcare pricing, Indian pharma faces the challenge of absorbing pricing pressure while maintaining its role as a cornerstone of affordable medicine supply to the United States.

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- IANS