Most-Favored-Nation pricing is pressuring generic drug margins. Dr. Reddy's finance director shares the cost optimization and supply chain strategies manufacturers are using to sustain affordability. Against this backdrop, the Most-Favored-Nation pricing is further adding pressures to cut drug spending. In an executive order signed in May 2025 , the Trump administration set out to tie what the United States pays for a drug to the lowest price charged in a comparable wealthy country, with targets benchmarked to the lowest price in any OECD nation whose per-capita GDP runs at least 60% of America’s. Manufacturers have a path to comply voluntarily…
In the U.S. market, generics play a significant role in reducing overall drug spending. The FDA, for instance, estimated that the generics it approved in 2022 alone saved $18.9 billion in their first year on the market. Those savings come out of margins that keep thinning, because generic retail prices are in sustained deflation, as Brookings…
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