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New Delhi: US pharmaceutical companies have raised strong objections to India’s drug pricing framework, particularly the price caps imposed by the National Pharmaceutical Pricing Authority (NPPA), and have sought a blanket exemption for patented medicines, according to a recent report by the US Trade Representative (USTR).
The concerns were highlighted in the USTR’s latest National Trade Estimate (NTE) report on foreign trade barriers, where US stakeholders argued that India’s price control regime restricts returns on innovation-driven medicines and discourages companies from operating in the market.
Demand for exemption on patented drugs
US drugmakers have proposed that patented medicines should be exempt from price controls for the entire duration of their patent life. Currently, India grants patents for up to 20 years, but under the Drug Price Control Order (DPCO) 2013, patented and orphan drugs enjoy price exemption for only five years.
After this exemption period, the NPPA fixes a ceiling price, allowing only limited annual increases based on the Wholesale Price Index (WPI).
Push for market-based pricing
For off-patent drugs, US stakeholders have called for a shift to market-based pricing instead of the existing ceiling price mechanism. They argue that medicines often see a steep price drop—around 50%—after patent expiry, impacting profitability.
Pharmaceutical companies have also claimed that India’s price controls do not adequately account for rising input costs, inflation, or the level of technological innovation involved in drug development.
Concerns over access and affordability
However, public health experts in India have pushed back against these demands. They argue that removing price controls could undermine access to affordable medicines and conflict with the government’s obligation to ensure healthcare under the constitutional right to life.
Experts have warned that granting full exemptions to patented drugs could lead to monopolistic pricing without adequate safeguards for patients, especially in a country where out-of-pocket healthcare expenditure remains high.
Data sharing issues flagged
The USTR report also noted resistance from US companies regarding India’s requirements for sharing regulatory data submitted during drug approvals. Firms have expressed concerns that such disclosures could be used to support generic drug development, potentially reducing their competitive advantage.
Broader policy debate
The issue highlights an ongoing tension between encouraging pharmaceutical innovation and ensuring affordable access to medicines in India. While global drugmakers seek pricing flexibility to recover research investments, policymakers and health advocates continue to prioritise affordability and public health safeguards.