The Indian Pharmaceutical Alliance (IPA) has highlighted the importance of balancing innovation with affordability in the healthcare ecosystem while responding to the US Executive Order on Drug Pricing. “The Executive Order issued by the US Government seeks to balance innovation, access, and overall healthcare costs,” the IPA statement read.

U.S. President Donald J. Trump has signed an Executive Order on May 12, aiming to reduce the cost of prescription drugs in the United States by aligning domestic prices with those paid in other developed nations.

Balancing Innovation with Affordability: IPA

Sudarshan Jain, Secretary General of the IPA, said the Order seeks to strike a balance between innovation, access, and overall healthcare costs. “Research and development in life sciences demand long-term commitment, substantial investment, and carry high risk. The Order emphasizes that the cost of innovation should be shared equitably among all stakeholders.”

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The Executive Order states that the U.S. administration shall communicate the price targets to pharmaceutical companies within 30 days. The Order intends to take action if pharmaceutical companies fail to implement lower prices.

“Innovator companies are expected to be affected, with a 30-day window to align their U.S. prices with Most-Favoured-Nation (MFN) pricing,” Jain noted.

Generic pharmaceutical industry unlikely to bear the brunt: IPA

While discussing its impact, the IPA revealed, “The generics industry is unlikely to be impacted, as it operates on razor-thin margins. In the U.S., the generics industry represents 90% of prescription volumes while accounting for only 13% of the market value. The generics industry plays a pivotal role in ensuring medicines remain affordable and accessible.”

Awaiting Implementation Details

While the full implications of the Order are yet to unfold, the IPA says it’s awaiting further clarity, “further details on implementation mechanisms will bring more clarity.”

This directive marks a continuation of President Trump’s earlier attempts (during his first tenure) to address price disparities in the pharmaceutical sector. “Our citizens (Americans) pay massively higher prices than other nations pay for the same exact pill, from the same factory, effectively subsidizing socialism abroad with skyrocketing prices at home.”