In today’s Finshots, we follow a $2 billion cancer-drug deal, review India’s decades-old drug-manufacturing playbook, and ask whether an “America-first” clampdown could force domestic drugmakers to climb the value ladder faster than ever.

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The Story

Just last week, Glenmark signed what could be one of the largest deals in the Indian pharma industry. This is a $2 billion licensing deal with AbbVie for an experimental cancer drug called ISB 2001.

And it’s not every day that a $2 billion deal happens in the pharma industry in India. So, why is this different?

Well, ISB 2001 is a first-in-class bispecific antibody for the treatment of relapsed multiple myeloma (a type of cancer). And this kind of cutting-edge formula belongs to a completely different league from manufacturing generic drugs, which Glenmark is currently doing.

You see, ISB 2001 is still in early clinical testing (Phase 1) but has been granted special FDA designations to help speed up development due to its potential. The drug itself is a trispecific antibody that locks T‑cells onto two myeloma targets (BCMA and CD38) via CD3.

In simple words, it’s a highly engineered molecule that trains the immune system to hunt down and kill cancer cells more precisely, even in patients who’ve stopped responding to other treatments. And that’s what makes this deal so important, not just for Glenmark, but for the Indian pharma Industry as a whole.

It’s driven by deep research and original IP, rather than reproducing existing drugs. And this is exactly what Indian pharma companies must do if they want to thrive globally. Let me explain.

India’s pharmaceutical industry is worth over $50 billion. And over 50% of that is exports. And over a third of those exports go to the US. This makes the industry quite dependent on the US. 

However, here’s the thing. Donald Trump has once again been quite vocal about slashing drug prices by as much as 30-80%. He wants pharmaceutical companies to bring down the cost of prescription medicines in the US. 

Now, of course, this is a win for American consumers. But it adversely impacts desi drug manufacturers.

You see, Indian pharma companies primarily manufacture generic drugs. For the uninitiated, these are essentially off-patent versions of drugs whose original creators no longer hold exclusive rights.

Take paracetamol, for instance. It’s a widely used pain reliever. While the branded version might be sold as Crocin, dozens of companies manufacture and sell paracetamol in different forms and packaging. Sure, the core molecule remains the same, but competition drives prices down. And that is the nature of generics.

This competition is why they already operate on razor-thin margins. Any forced price reduction would compress those margins even further. If the US government puts pressure on pharma companies to negotiate harder or accept price caps, Indian firms, which are often the last link in a long supply chain, may have to absorb the hit.

In May this year, Trump promised a Most Favoured Nation drug-pricing model that would peg what Medicare pays to the lowest price among ‘rich’ countries. Tariffs on Chinese active-ingredient imports were the headline grab, but it seems like the knife would cut across the board. Indian generics are unlikely to face direct duties, but lower invoice prices mean thinner margins, even before freight and regulatory costs.

And while it’s not sure if the Indian pharma industry is in the tariff crosshairs just yet, the industry is clearly bracing for impact.

But even if tariffs come up, several Indian firms are ready. 

For instance, Sun Pharma has over 3 manufacturing facilities in the US, Cipla has a major plant, and Aurobindo Pharma has acquired several smaller plants over the years.

The long-term solution, however, isn’t just to buy up manufacturing facilities abroad. Sure, that might help soften the blow of tariffs or shipping costs. But it doesn’t change the underlying problem. The real opportunity lies in moving up the value chain by investing meaningfully in research and development.

That means developing new drugs, treatments, and vaccines, especially for diseases that are underfunded or underserved. That’s where the high margins are. Unlike generics, which are essentially copies of existing drugs with wafer-thin profits, novel therapies and specialty drugs offer pricing power, longer exclusivity, and far greater value per molecule.

But climbing the ladder is easier said than done. There’s a complication at home too, one rooted in India’s own patent law. Under the Indian Patents (Amendment) Act, 2005, Indian firms can manufacture and sell generic versions of a drug even if it’s patented overseas as long as these conditions are met:

1. Section 3(d): Anti-evergreening clause 

New forms of known substances are not patentable unless they show enhanced therapeutic efficacy.

2. Section 107A: Bolar exemption 

Allows manufacturing and selling of a patented drug for purposes related to obtaining regulatory approvals in India or abroad.

3. Section 84: Compulsory licensing 

After 3 years of patent grant, a compulsory license may be issued if the reasonable requirements of the public are not met, the drug is not available at a reasonably affordable price

4. Section 92A: Compulsory license for export

Allows compulsory licensing to manufacture and export patented drugs to countries with insufficient or no manufacturing capacity in the pharmaceutical sector.

These provisions help ensure affordable access to medicines, especially in a country where public healthcare spending remains low. But it also creates fierce domestic competition. The moment these conditions are met, multiple firms rush in and start manufacturing, which drives prices down sharply. And if we want to keep closing billion-dollar deals, we may have to rewrite the rules that got us here in the first place, but while balancing what is good for you and me, the common man.

At the end of the day, unless Indian pharma climbs the value chain by securing more Glenmark-style deals and widening its research footprint, its reliance on low-margin generics will continue to be a vulnerability. To build resilience, Indian drugmakers will need to invest more aggressively in novel drug development, specialty therapies, and complex treatments – areas where margins are higher and competition is thinner.

However, as for an immediate solution, an Indian delegation is currently in Washington negotiating the trade deal. This offers a narrow window for India to defend its exporters, but the longer-term fix lies in investing in novel therapies, not just copies of them.

Until then…

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