📄 Case Study: Multilateral Regulation for Prescription Drugs

📝 Executive Order on Drug Price Parity and Its Implications

One of numerous executive orders of the President aims to achieve global price parity for prescription drugs sold in Country X. This move offers hope to many citizens burdened by high healthcare costs.

However, enforcing this rule in practice might be challenging, as it may entail import-export rules that do not align with existing legislation of Country X.

Similar to the President’s previous attempts to lower drug prices during his first term, this move could also encounter legal challenges.

🔍 Government Actions Against Big Pharma

The government can take some action against large pharmaceutical companies, commonly referred to as ‘Big Pharma’, by:

• Encouraging less expensive generic drugs

• Ending unfair practices that delay the release of generics

Perhaps, Country X pharmaceutical companies have not yet responded negatively, possibly because the new order has little effect on their profits.

🌐 Impact on Indian Pharmaceutical Exports

• The majority of Indian pharmaceutical exports to Country X fall into the low-profit generic drugs market, which is less vulnerable to the President’s regulations.

• Indian businesses might not receive preferential treatment for their branded medicines, as Country X might prefer to purchase them from developed countries like Germany, UK, or France.

• Additionally, as seen in trade negotiations with China, Country X views pharmaceuticals as a sensitive area and might continue imposing special import duties.

🇮🇳 India’s Position

• Generic medications from India are currently free from import duties in Country X.

• However, Country X might now insist on the same tariff-free treatment for its own pharmaceutical exports to India.

Meanwhile, India has established a solid international reputation as a supplier of affordable medications.
It can bargain for better trade conditions by using this global image.