India's generic drug exports to dampen under Trump's pharma orders: Report

Indian pharmaceutical companies could face major headwinds in the US market as a result of US President Donald Trump’s move to promote prescription drugs made in America.The orders are seen as a potential game-changer for the global drug supply chain and could significantly disrupt Indian drug exports, especially in the generics drugs space, according to a report by Nuvama Research.“The new development, if fully implemented, can disrupt and reshape global pharma supply chains. Over the past few months, we have been observing the announcement of the cumulative $15 billion capex plans in the US by innovative pharma companies,” the report said.India, often called the “pharmacy of the world,” has built a strong export presence in generics by utilising lower production costs. As a result, many Indian drugmakers constitute a large portion of suppliers of low-cost medicines to the US market.Trump’s new directives instruct US agencies to reshore drug manufacturing, including active pharmaceutical ingredients (APIs), key starting materials (KSMs), and other raw materials.The shift threatens to erode the cost advantage that Indian firms have long relied upon. According to the report, “while Indian companies have remained silent due to the cost arbitrage offered by manufacturing in India. The new order, if implemented, may have the potential to restructure the US generic supply chain as it directs highlevel efforts for the US agencies to re-shore manufacturing back to the US.”Trump’s orders also include faster regulatory approvals for domestic plants, stricter compliance checks on foreign facilities, and potentially higher fees for overseas manufacturers, further tightening the screws on international suppliers.Another challenge is the expected requirement for drugmakers to disclose the origin of their APIs. While many Indian pharma firms manufacture finished formulations locally, they remain heavily dependent on China for key ingredients, which could expose them to greater scrutiny and regulatory hurdles in the US market.The executive actions are part of the administration’s broader biosecurity agenda. One of the orders even restricts funding for research that enhances virus pathogenicity, citing risks to national security.Although the overall financial and operational impact will be unveiled with time, the Trump admin’s efforts for domestic drug manufacturing reflects a clear policy transition that could change the worldwide pharmaceutical supply chain.