Trump drug pricing order to have limited credit impact on Indian pharma: CRISIL

India’s pharmaceutical sector is expected to weather the impact of the latest U.S. Executive Order aimed at slashing prescription drug prices, according to a credit alert issued by CRISIL Ratings. The order, which introduces a Most Favoured Nation (MFN) pricing model, seeks to cut prices of branded drugs in the U.S. by 30–80% by benchmarking them against the lowest prices in peer Organisation for Economic Co-operation and Development (OECD) countries.

CRISIL, which analyzed 190 rated pharma companies accounting for over half of India’s ₹4.5 trillion industry revenue, concluded that the move will have a “limited impact” on Indian players. The report says exports to the U.S. are dominated by generics, which already account for 90% of prescription volumes but just 13% of value, and are priced lower than in peer nations.

“The MFN model primarily targets high-margin branded innovator drugs and excludes generics and biosimilars,” CRISIL noted. “Hence, the bulk of India’s exports are unlikely to be significantly affected.”

However, the report flagged potential indirect risks. These include reduced pricing headroom for upcoming generics of drugs going off-patent, and margin pressures for Indian contract manufacturing organizations (CMOs) and contract research organizations (CROs), as global pharma majors recalibrate R&D budgets and renegotiate outsourcing contracts.