Trump's new executive orders may hit Indian Pharma exports, reshape global drug supply chains: Report

New Delhi [India], May 7 (ANI): The recent executive orders on pharma issued by President Donald Trump are expected to create significant challenges for Indian pharmaceutical companies, especially those operating in the U.S. generic drug market, according to a report by Nuvama Research.

These policy moves aim to prioritize domestic manufacturing of pharmaceuticals in the United States and could reshape global drug supply chains if implemented strictly.

The report said "The new development, if fully implemented, can disrupt and reshape global pharma supply chains. Over the past few months, we have been observing announcement of the cumulative USD15bn capex plans in the US by innovative pharma companies".

India, known as the "pharmacy of the world," has long enjoyed a cost advantage in manufacturing drugs, particularly generics. Many Indian companies export medicines to the U.S., benefiting from lower operational costs.

However, the Trump administration's orders now push U.S. agencies to bring back (re-shore) drug manufacturing--including APIs (Active Pharmaceutical Ingredients), KSMs (Key Starting Materials), and raw materials--into the U.S. itself.

As per report, this shift poses a direct threat to Indian drug makers, as it could reduce the cost arbitrage they have enjoyed so far.

In addition, Trump's directive includes faster regulatory clearances for U.S.-based plants, increased inspections of foreign facilities, stricter compliance measures, and higher fees for foreign manufacturers.

The report said "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".

If these measures are fully enforced, they could raise operational costs for Indian companies and weaken their competitive edge.

Another major concern is the likely mandate to disclose the source of APIs used in drug manufacturing. Indian pharma firms, although producing many formulations domestically, rely heavily on Chinese imports for APIs.

This could put them under further scrutiny in the U.S. market and hurt their business prospects.

The orders are also aligned with the administration's broader focus on national biosecurity. One of the two orders also limits funding for research linked to increasing virus pathogenicity, citing potential biosecurity threats.

Overall, while the full financial and operational impact will unfold over time, the Trump administration's push for domestic drug manufacturing marks a clear policy shift that could significantly alter the global pharmaceutical supply chain. (ANI)

(The story has come from a syndicated feed and has not been edited by the Tribune Staff.)