US flags barriers in India pharma market, says Ayushman scheme not reimbursing patented medicines
The concern has been highlighted in the 2026 National Trade Estimate Report on Foreign Trade Barriers released by the office of the United States Trade Representative
American pharmaceutical companies developing cutting-edge, patented medicines are struggling to tap India’s vast healthcare market, with the Centre’s flagship insurance scheme — Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) — not reimbursing such drugs.
The concern has been highlighted in the 2026 National Trade Estimate Report on Foreign Trade Barriers released by the office of the United States Trade Representative, which assesses trade impediments faced by American companies globally.
The report notes that US innovative pharmaceutical firms are “largely unable to access the majority of India’s pharmaceutical market” as AB-PMJAY, which covers over 700 million Indian citizens, excludes patented medicines from reimbursement.
The findings come amid ongoing negotiations between India and the US for a proposed bilateral trade agreement, which seeks to address market access issues and rebalance trade ties.
The report also raised concerns over India’s drug pricing regime, particularly caps imposed by the National Pharmaceutical Pricing Authority, arguing that such controls do not adequately reflect the cost of innovation and production.
Apart from pharmaceuticals, the report flags a range of barriers, including high tariffs, price controls and regulatory complexities. India’s average applied tariff rate stood at 16.2 per cent, with significantly higher duties on certain products, including drug formulations and agricultural goods.
Regulatory hurdles such as cumbersome import licensing procedures, delays in approvals and inconsistent customs practises have further added to challenges faced by US exporters, the report states.
The report, overseen by US Trade Representative Jamieson L Greer, is expected to feed into ongoing trade negotiations, where Washington is pushing for reduced tariffs, removal of non-tariff barriers and greater policy predictability.
The report also notes that both the US and India will continue to work toward finalising the interim agreement.
