As India and the United States move closer to finalising a bilateral trade agreement, the pharmaceutical sector has emerged as a key area of negotiation, with India proposing a series of reforms and incentives aimed at expanding its generic drug footprint in the US, Mint reported, citing people familiar with the matter.
India’s proposals reportedly include sharply reduced pricing for complex generic medicines, patent reforms to curb 'evergreening' practices by US pharma companies, enhanced US-based manufacturing of APIs (active pharmaceutical ingredients) and FDFs (fixed dosage forms) by Indian firms, and tariff exemptions for critical drugs imported from the US.
According to Mint, India has offered to supply complex generics at just 20–25 percent of the branded drug prices for the first three years after patent expiry, with an additional 10–15 percent reduction over the following seven years. This pricing proposal comes against the backdrop of the US administration’s aim to cut domestic drug prices, and the fact that nearly half of all US prescriptions are filled with generics manufactured by Indian companies.
India has also proposed a strategic alignment with Washington’s 'Make in America' policy, suggesting that the final stages of drug processing, including semi-finished and finished dosage forms, could be completed in the US. In return, Indian negotiators are seeking targeted incentives for domestic pharmaceutical companies willing to establish manufacturing units for APIs and formulations on American soil, Mint reported.
“Other countries are hesitant to invest in US-based manufacturing of low-cost generics unless the drugs are high-value or there is a critical supply gap,” a source told Mint. “India has effectively mastered this space.”
In the area of intellectual property rights, India has reportedly suggested tightening restrictions on patent evergreening, the practice of extending patent protection by making minor changes to existing drugs. Indian negotiators are also said to have proposed reducing the duration or scope of patent exclusivity to expedite the entry of generics into the market. Although Indian law under Section 3(d) of the Patents Act already limits such practices, the country is now willing to go further, according to the report.
Additionally, India has proposed tariff exemptions for life-saving and low-margin critical drugs, and has pushed for greater transparency and public access to US export-import data, Mint said.
Queries sent to India’s commerce ministry and the pharmaceutical industry body Pharmexcil remained unanswered at the time of publication. A US Embassy spokesperson told Mint, “We do not comment on ongoing bilateral negotiations.” Moneycontrol could not independently verify the report.
These developments follow a high-level visit to Washington by a delegation led by Rajesh Agarwal, Additional Secretary in the Ministry of Commerce. Officials described the recent round of discussions as 'positive,' and the first tranche of the bilateral trade agreement is expected to be concluded before July 8, the deadline marking the end of the 90-day pause on President Donald Trump’s reciprocal tariff plans.
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