Kiran Mazumdar-Shaw, the Chairperson of Biocon Group, has weighed in on US President Donald Trump’s latest move to curb soaring healthcare costs in the United States. Speaking in response to the executive order signed by Trump, Shaw highlighted the primary objective of narrowing the pricing gap between the US and other developed markets like Europe.

“President Trump clearly called out the huge price differential between developed markets, especially Europe and the US,” Shaw said, noting that in some cases, US consumers pay 50–80% more than Europeans for the same drugs. Trump’s executive order now mandates drug companies to lower US drug prices to match those in other countries, giving them 30 days to comply.

Focus on Middlemen Driving Up Drug Prices

Shaw emphasized that Trump’s criticism wasn’t solely aimed at pharma companies, but also at the middlemen—especially Pharmacy Benefit Managers (PBMs) and wholesalers—who are believed to be contributing to inflated costs. These intermediaries often take a significant cut from the supply chain, resulting in higher retail prices for consumers.

Trump’s plan to bypass or reduce the influence of these middlemen is viewed as a key step in tackling artificially high drug prices. Shaw explained that Trump’s approach is centered around drug pricing mechanisms, rather than adding import tariffs or additional regulatory burdens.

Generics and Biosimilars Not the Target

According to Shaw, generic drugs and biosimilars, which form a large part of India’s pharmaceutical exports, are not part of Trump’s crackdown. These categories are already included under the Affordable Care Act (ACA), and their pricing is significantly lower than that of patented or high-value branded drugs.

This development comes as a relief to Indian drugmakers like Biocon, which are heavily invested in the biosimilar and generic segments. Shaw clarified that Trump’s primary concern lies in shrinking the value concentration of expensive, branded medications, rather than disturbing the generic drug market.

Trump's 80/20 Strategy on Drug Value

Kiran Mazumdar-Shaw highlighted a crucial market insight: 80% of prescription drugs by volume account for only 20% of total market value, while the remaining 20% by volume represents a whopping 80% of the value. It’s this 20% high-value segment that Trump wants to target, making it more affordable for the American population.

This strategy underscores the urgent need to reform the pricing of critical life-saving branded medications such as those used in oncology, immunotherapy, and rare diseases, which often bear sky-high costs.

Impact on Developing Markets Like India

Shaw dismissed concerns about potential price increases for imported or licensed drugs in India, explaining that President Trump has no intention of disturbing drug pricing in developing nations. The pharma companies already offer lower price points in such markets due to affordability factors.

Interestingly, Trump has excluded Europe from price cuts, citing that Europe doesn’t need lower prices and the real issue lies with US consumers being overcharged. This dual pricing strategy, where US markets often serve as the primary profit generators, is under scrutiny with this policy move.

Biocon Stock Reflects Positive Sentiment

As of 1:38 pm on the NSE, Biocon's stock was trading at ₹329.50, showing a 9% gain over the last year. This could reflect investor optimism, especially as the company is not significantly impacted by Trump’s directive. With its strong focus on generics and biosimilars, Biocon continues to maintain a favorable position in the global pharma landscape.

A Cautious Yet Strategic Shift in US Pharma Policy

President Trump’s aggressive approach towards cutting drug prices is being observed carefully by both domestic and global pharma players. While some analysts view the executive order as a positive move for affordability, others express concern over how drugmakers might react, particularly in the case of revenue realignments and R&D investments.

For Indian pharma companies like Biocon, the impact appears to be neutral to mildly positive, as long as the focus remains on high-end patented drugs and doesn’t spill over to generics and biosimilars.

Key Takeaways from Biocon Chairperson’s Remarks

• Trump's 30-day timeline to drugmakers marks a serious attempt to close the pricing gap between the US and other countries.

• Middlemen like PBMs are under fire, suggesting potential structural changes in how drugs reach consumers in the US.

• India’s pharma exports, especially in the generics and biosimilars space, are unlikely to face immediate challenges due to this policy shift.

Conclusion

President Trump’s initiative is a landmark move that has stirred global conversations on drug pricing fairness, transparency, and accessibility. With industry leaders like Kiran Mazumdar-Shaw offering insights, the world watches how US pharma policy evolves and what that means for global pharmaceutical ecosystems.

As Biocon continues to focus on affordable and accessible healthcare, the company appears well-aligned with the direction that global healthcare reform is taking. The executive order could eventually reshape pharma economics, pushing all stakeholders to re-evaluate pricing strategies, especially in developed markets like the US.

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