Expect a 'soft-landing' for Indian pharma: Biocon's Kiran Mazumdar-Shaw on Trump's drug order

Biocon’s Kiran Shaw said generics and biosimilars are being scrutinised but these are not the target, as they do not fall under the big pharma bracket which comprises 80 percent of the US pharma sector.

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India’s pharma should see a ‘soft landing’ and will remain largely unaffected by US President Trump’s executive order on prescription drug pricing, said Kiran Mazumdar-Shaw, Chairperson and Managing Director of Biocon, adding that one needs to wait for more details on the order to ascertain the full impact.

Speaking to CNBC TV18 on May 13, Kiran Shaw said Trump had brought up the issue of reference pricing during his first term as US President and has now questioned the policy of dual pricing by companies which leads to different prices in US and Europe.

“When it comes to the US, they are almost paying 50-80 percent higher than European countries. So, I think that's his first target, where he wants to reduce this big disparity that he sees. The second one that he called out is the middleman, which obviously refers to Pharmacy Benefit Managers (PBMs) and wholesalers, who keep drug pricing high for patients," Shaw said.

Also Read: Trump signs order to slash US drug prices, clarity awaited on generic drugs

On May 12, Trump signed an executive order to align US prescription drug prices with those paid by other developed nations, reviving the controversial ‘Most-Favored-Nation’ (MFN) pricing model proposed during his first term.

Biocon’s Kiran Shaw said generics and biosimilars are being scrutinised but these are not the target, as they do not fall under the big pharma bracket which comprises 80 percent of the US pharma sector.

India Supplies Nearly 40% of US Generics

When asked about Contract Development and Manufacturing Organizations (CDMOs) in India being affected and their future business prospects, Shaw said, “there are two sides to this, one is they want localisation of manufacturing. On the other hand, drug companies will look up at cost reduction to make up for the dent that drug pricing in the US is going to make to their business. They will have to rethink their investment in US manufacturing, if this policy is carried through.”

Once Big Pharma implements cost reductions, Kiran Mazumdar-Shaw said both Contract Research, Development, and Manufacturing Organization (CRDMOs) and CDMOs will benefit from increased demand.

Kiran Shaw weighed in on R&D spend as well, which is being fuelled by high-priced drugs, and said India provides a good, affordable option for R&D to be done in these parts of the world. “I think they will actually invest more in contract research and drug manufacturing, and it will go up to phase 3 clinical trials,” she added.

Shaw said that Biocon has manufacturing facilities across America as well as partnerships with other companies in order to be closer to the market and its patients.

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