The unexpected victory of Donald Trump in the U.S. presidential election has sent shockwaves reverberating throughout the world – but it has been suggested by some that his win is good news for Indian drugmakers.
The President elect’s rhetoric on the campaign trail was often inflammatory and controversial. It included blaming India and China for “the greatest jobs theft in the history of the world” and improvising a “racist” impersonation of an Indian call centre worker. However, whilst the Indian press are polarised over the wider implications of his presidency, some pharma experts are hopeful that Trump’s administration will bode well for India’s pharmaceutical industry.
Many commentators have cited the Republican Party’s historically pro-industry, free market capitalist stance as reason to be optimistic.
According to the Business Standard, Kewel Handa, director of Salus Lifecare, anticipated that Trump would “remove restrictions on drug pricing”, which he said would “benefit India.”
Dinesh Dua, chief executive officer (CEO) of Nectar Lifesciences, followed similar lines and was quoted by Livemint as stating “to my mind, they [the Republicans] will be very open to free market pricing rather than controlling prices.”
Also quoted by Livemint, Nilesh Gupta, managing director of Lupin Ltd., was more qualified in his remarks, commenting “I don’t really see any meaningful impact, especially not in the near term”, but nevertheless said that Trump was the better outcome, citing the Republicans’ historically “pro-industry” stance. Lupin’s CEO Vinita Gupta commented “I don’t see much changing.”
Had Trump’s Democratic opponent Hillary Clinton won the election – as was expected by the vast majority of pollsters and pundits – the pharmaceutical sector’s response would likely have been muted and markedly less confident. Prior to the election, the Economic Times reported that a Clinton presidency would “pose pricing challenges” for Indian pharma, predicting “the end of a dream run.”
Their optimism does not seem to be misplaced, at least for now. The Bombay Stock Exchange (BSE) health index gained 1.5 percent, whilst pharma companies such as Sun Pharmaceutical and Dr. Reddy Laboratories saw their stocks rise.
Among his proposals to reform healthcare in the United States, the President elect has advocated the removal of “barriers to entry into free markets for drug providers.”
He has repeatedly pledged to repeal the Affordable Care Act – outgoing President Barack Obama’s flagship health policy – as well as the Trans Pacific Partnership (TPP) deal. Both would entail the negotiation of new trade deals. This holds huge implications for intellectual property and, consequently, access to medicines. Médecins Sans Frontieres reported in 2013 said that the TPP deal includes “aggressive intellectual property (IP) rules that would restrict access to affordable, lifesaving medicines for millions of people.”
Trump has articulated in no uncertain terms that he plans to reduce drug prices, with proposals including allowing Medicare and Medicaid to negotiate directly with drug manufacturers – also good news, as Indian generic drugmakers tend to prosper in a low-cost market.
Livemint reports that India exported $3.8 billion worth of drugs to the U.S. in 2014-15 – accounting for approximately a third of total exports.