Trump Orders To Buy American Medicines Impact Indian Pharma

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US President Donald Trump has signed an order aiming to boost domestic production of “essential medicines” and “critical” drug
Since India is one of the largest overseas suppliers of medicines to the US, what impact it will have?

What is the order?

The US President on Thursday directed each executive department and agency involved in medicine procurement to identify vulnerabilities in supply chains for essential drugs.
The order mandates the creation of a list of essential medical products and directs the fast-tracking of regulatory clearances for domestic producers.
Federal agencies are to consider a “variety” of actions to increase their procurement of such products and their critical ingredients from domestic sources,
While also protecting the country’s service members, veterans and their families from increases in drug prices.
They also have to ensure that the measures they implement do not interfere with America’s ability to respond to the Covid-19 outbreak.

The US, like most countries, is dependent on countries like China and India for critical products like medicines.
This dependence put the Trump administration in a tight spot during the pandemic, which highlighted the extent of their presence in global supply chains.
For instance, when China’s Hubei province went into lockdown earlier this year, it strained India’s supply of certain critical medicines, including paracetamol, to the world.
At that time, India restricted exports of 13 critical key ingredients, ranging from essential antibiotics to vitamins,as well as the medicines made from these.
This is because India is heavily dependent on China for these ingredients and wanted to safeguard its own domestic supply until Hubei’s lockdown was lifted.
When Trump began touting hydroxychloroquine as a ‘miracle’ in Covid-19 treatment, India was found to be the largest supplier.
Trump in April held calls with Prime Minister Narendra Modi torelease stocks of this drug to the US and, at one point even threatened retaliatory action if restrictions were not lifted.
Like India,
The US seems to have realised the need to maintain domestic capacities of essential medicines.

The US is the largest market for India’s pharmaceutical products.
It is said that every third pill sold in America is made in India.
According to the Pharmaceutical Export Promotion Council of India (PHARMEXCIL) India’s pharmaceutical exports to the US are ex-factory valued at around $6 billion.
Its generic drugs are popular in the US due to their low cost, which makes them more affordable.

Trump’s order does not specify any one country, though industry executives and government officials here claim it will mainly target China.
Several experts tracking India’s pharmaceuticals industry feel the move could also be posturing by Trump before the presidential election in November.
In the short term, the order is not likely to impact Indian pharmaceutical firms.
A major reason is that Indian drugs are “largely” not involved in US public procurement
USA mainly involve the US, EU and other members in public procurement processes.
Also the order will not apply in cases where procuring domestic essential medicines will bring costs for the agency up over 25%.
Nor does it apply in cases where there are no sufficient domestic alternatives.
However, some are cautious about possible larger consequences.
There are other bills being worked on which will mandate CMS (the Centers for Medicare & Medicaid Services) to buy local.
That is a very large segment & will have huge impact on Indian pharma industry.