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“What we understand is that this is largely targeted towards branded drugs…As of now, what we understand is that this is a voluntary measure that perhaps the companies will be taking,” Vohra stated.
He noted that there are aspects of MFN clauses etc and it is not clear as of now how and in which manner the Executive Order will be implemented.
“So as of now, from a generic perspective, I think generic (drug) prices in the US are already significantly comparable with the rest of the world, in some cases it is lower. So we don’t believe that at least for now, based on what the promulgation says we think this is more (towards) branded sector…rather anything on the generic side,” Vohra said.
On May 12, Trump signed an executive order setting a 30-day deadline for drugmakers to lower the cost of prescription drugs in the US.
The order calls on the health department to broker new price tags for drugs. If a deal is not reached, a new rule will kick in that will tie the price of what the US pays for medications to lower prices paid by other countries. Replying to a query regarding the impact on the company’s business if the US government imposes tax on pharmaceutical imports, Vohra said: “Our business continues as usual. There’s never been any stoppage at any place in the US on account of any confusion with respect to tariffs. “And so we don’t see the impact. In any case, we are in the generic sector. The purpose of what we do is to provide medicines to people who really need it from an affordability perspective. So as of now, we don’t see any impact of tariffs on our business,” he added.
Vohra noted that a lot is going to happen between the US government and the Indian government.
“We are monitoring all of that. And you know, we don’t expect material changes to the business environment for generics,” he said.
He noted that even if the Trump administration brings in the tariffs, it is going to be significantly lower than the other regular goods.
“I don’t think there’s one answer on whether everything will be passed on to the customers or everything will be absorbed. I think it’s going to be a combination of the two,” Vohra said.
India currently levies about 10 per cent import duty on American drugs while no charges are levied on Indian drugs being imported by the US.
The Trump administration is likely to impose tariffs on drug imports into the US in the days to come.
In April, the US government exempted the Indian pharma sector from reciprocal tariffs, recognising the vital role played by the domestic industry in supplying affordable medicines across the globe.
