{"id":166000,"date":"2025-05-13T19:18:34","date_gmt":"2025-05-13T13:48:34","guid":{"rendered":"https:\/\/pwonlyias.com\/stage\/?post_type=current-affairs&p=166000"},"modified":"2025-05-13T19:18:34","modified_gmt":"2025-05-13T13:48:34","slug":"trumps-most-favoured-nation-policy","status":"publish","type":"current-affairs","link":"https:\/\/pwonlyias.com\/stage\/current-affairs\/trumps-most-favoured-nation-policy","title":{"rendered":"Trump&#8217;s Most Favoured Nation (MFN) Policy on Drug Pricing"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">On May 12, 2025, US President Donald Trump signed an executive order invoking a <\/span><b>\u201cMost Favoured Nation\u201d (MFN)<\/b><span style=\"font-weight: 400;\"> pricing policy aimed at drastically reducing drug prices in the US.<\/span><\/p>\n<h2><span style=\"font-size: 18pt;\"><b>Key Highlights of Executive Order<\/b><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Price Benchmarking:<\/b><span style=\"font-weight: 400;\"> US drug prices will be aligned with the lowest prices paid internationally among developed nations.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Anti-Profiteering:<\/b><span style=\"font-weight: 400;\"> The policy is framed as a strike against \u201cmiddlemen\u201d and pharmaceutical profiteering.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Voluntary Compliance:<\/b><span style=\"font-weight: 400;\"> Companies are being encouraged to voluntarily reduce prices, although legal enforcement mechanisms remain unclear.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Electoral Messaging:<\/b><span style=\"font-weight: 400;\"> Framed as restoring \u201cfairness to American consumers\u201d and part of broader healthcare reform.<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-size: 18pt;\"><b>About MFN<\/b><\/span><\/h2>\n<ul>\n<li><b>MFN Clause (Article 1, GATT 1994):<\/b><span style=\"font-weight: 400;\">\u00a0 Under WTO rules, member nations cannot discriminate between their trading partners. If one country is given a special trading benefit (like reduced tariffs), the same must be extended to all other WTO members.<\/span><\/li>\n<li><b>India\u2019s Example: <\/b><span style=\"font-weight: 400;\">India granted MFN status to Pakistan from 1996 to 2019, but revoked it after the Pulwama terror attack, showing how MFN can be politically retracted<\/span><b>.<\/b><\/li>\n<\/ul>\n<h3><span style=\"font-size: 16pt;\"><b>Implications for India<\/b><\/span><\/h3>\n<div class=\"vc_table_green\"><\/p>\n<table style=\"width: 99.6968%;\">\n<tbody>\n<tr>\n<td style=\"width: 18.9379%; text-align: center;\"><b>Aspect<\/b><\/td>\n<td style=\"width: 83.9737%; text-align: center;\"><b>Details<\/b><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 18.9379%;\"><b>Pharma Exports<\/b><\/td>\n<td style=\"width: 83.9737%;\"><span style=\"font-weight: 400;\">India exports <\/span><b>~$9 billion<\/b><span style=\"font-weight: 400;\"> worth of generic drugs to the US annually. Price benchmarking could <\/span><b>squeeze margins<\/b><span style=\"font-weight: 400;\">, affecting India\u2019s <\/span><b>pharma trade surplus<\/b><span style=\"font-weight: 400;\">.<\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 18.9379%;\"><b>Global Pricing Pressure<\/b><\/td>\n<td style=\"width: 83.9737%;\"><span style=\"font-weight: 400;\">Indian firms may be pressured to <\/span><b>lower international prices<\/b><span style=\"font-weight: 400;\"> or risk <\/span><b>being excluded from US procurement<\/b><span style=\"font-weight: 400;\">, affecting global competitiveness.<\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 18.9379%;\"><b>Domestic Price Hikes<\/b><\/td>\n<td style=\"width: 83.9737%;\"><span style=\"font-weight: 400;\">To offset US losses, companies may <\/span><b>raise prices in domestic markets<\/b><span style=\"font-weight: 400;\">, affecting <\/span><b>drug affordability<\/b><span style=\"font-weight: 400;\"> in India.<\/span><\/td>\n<\/tr>\n<tr>\n<td style=\"width: 18.9379%;\"><b>R&#038;D Investment Impact<\/b><\/td>\n<td style=\"width: 83.9737%;\"><span style=\"font-weight: 400;\">Lower profitability may <\/span><b>curtail funding for research<\/b><span style=\"font-weight: 400;\">, <\/span><b>innovation<\/b><span style=\"font-weight: 400;\">, and <\/span><b>new drug development<\/b><span style=\"font-weight: 400;\">, weakening the long-term capabilities of Indian pharma firms.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><\/div>\n<div class=\"vc_table_green\"><\/p>\n<table style=\"width: 99.6375%;\">\n<tbody>\n<tr>\n<td style=\"width: 111.19%; 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