Historic India-EU Trade Deal Could Impact Prices Of Weight Loss And Lifesaving Drugs, Here's How

India and the European Union have finalised a historic Free Trade Agreement (FTA) after nearly two decades of negotiations, marking one of India's most ambitious trade pacts to date. The agreement aims to remove or sharply reduce tariffs on a vast majority of goods traded between the two economies, including pharmaceuticals, a sector critical to public health as well as India's export strength. Pharmaceuticals occupy a unique place in the India-EU trade relationship. India is a global leader in generic medicines and vaccines, while the EU is home to several multinational drug manufacturers producing high-value, innovative therapies. Under the new deal, tariffs on most EU exports to India, including chemicals, medical devices and medicines, are expected to be phased out over time.

According to an official Press Information Bureau (PIB) release, the India-EU partnership has deepened across trade, investment, innovation, and technology, reflecting longstanding cooperation that predates the current agreement and which already encompasses areas such as science and medical research. This expanded engagement sets the stage for smoother trade in high-value sectors like pharmaceuticals, where both sides stand to benefit from reduced barriers and stronger regulatory alignment.

While official statements from the EU Council's summit press releases focus on high-level cooperation across economic and innovation domains, they highlight trade, including pharmaceutical products, as a pillar of mutual benefit and resilience. This framework signals a long-term intention to integrate markets more closely, which may ultimately improve the availability and cost-competitiveness of medicines both imported from Europe and manufactured in India.

But could the trade deal make medicines cheaper in India?

How The India-EU Trade Deal Could Influence Drug Prices: Lower Tariffs, Lower Import Costs

According to official statements, the FTA will eliminate up to €4 billion worth of tariffs on EU exports, including pharmaceutical products. This could reduce customs duties that currently apply to imported medicines, medical devices and active pharmaceutical ingredients (APIs).

For imported drugs, including some high-end cancer therapies, biologics and weight-loss medications manufactured in Europe, lower tariffs can reduce the landed cost, the price after customs duty and freight. In theory, this makes it cheaper for distributors and hospitals to source such drugs.

Reactions from the Indian pharmaceutical industry suggest that the trade deal can have a transformational effect for healthcare access in India.

"In the short term, we anticipate a mild price reduction of 10-20%, but the real impact will unfold over the next 2-3 years, with prices potentially dropping by 40-70% once local manufacturing scales up, biosimilars enter the market, and patent expiries align," says Saurav Ojha, Co-Founder & Whole-Time Director, Iberia Pharmaceuticals. "This shift is particularly critical in the context of weight-loss drugs in the GLP-1 class, such as semaglutide and tirzepatide. India already has over 101 million diabetics, alongside a rapidly rising obesity and metabolic syndrome burden, making access to these therapies a public health priority. The trade deal can enable faster entry of biosimilars and generics, encourage local manufacturing, and reduce dependency on imports, which has historically kept these drugs expensive and out of reach. Such streamlined regulatory harmonisation can also help reduce time-to-market delays, thereby ensuring earlier availability of affordable alternatives. Affordable weight-loss drugs have the potential to become a pillar of preventive healthcare, helping reduce long-term complications, healthcare costs, and disease burden. From this perspective, the India-EU Trade Deal is not just a trade agreement, but a catalyst for more equitable and sustainable healthcare outcomes in India."

However, tariff reductions alone do not automatically translate into lower prices for patients.

Also Read: India-EU Seal Historic Trade Deal Amid Global Turmoil. Why It Matters

Weight-Loss Drugs: Why Prices May Not Fall Quickly

New-generation weight-loss drugs, particularly GLP-1 receptor agonists like Ozempic, Mounjaro and Wegovy, are among the most expensive medicines globally. Many are still under patent protection, allowing manufacturers to set prices with limited competition.

Even if import duties fall:

• Patent holders retain pricing power
• Regulatory approvals remain mandatory
• Distribution, storage and marketing costs add to retail prices

India's drug pricing regulator, the National Pharmaceutical Pricing Authority (NPPA), does not currently cap prices of most obesity drugs, meaning market forces largely determine costs. It is important to note that meaningful price reductions are more likely when patents expire and domestic manufacturers introduce generic or biosimilar versions, rather than through tariff cuts alone.

Lifesaving Drugs: Where the Deal Could Matter More

The impact may be more nuanced for lifesaving medicines, especially those used in oncology, cardiology, endocrinology and rare diseases.

1. Access to Advanced Therapies May Become Easier

Many advanced therapies, including certain cancer drugs, immunotherapies and enzyme replacement therapies, are manufactured primarily in Europe. Reduced tariffs could:

• Improve availability
• Lower procurement costs for hospitals
• Reduce pressure on public healthcare budgets

For government-run health schemes and tertiary hospitals that purchase medicines in bulk, even modest reductions in import costs can translate into better access or expanded coverage.

2. APIs and Raw Materials

India imports several specialised APIs and intermediates from the EU. Cheaper access to these inputs can lower manufacturing costs for Indian pharmaceutical companies, potentially benefiting both domestic patients and global supply chains.

Why Cheaper Imports Don't Always Mean Cheaper Medicines

Several factors beyond trade policy shape drug prices in India:

1. Pricing Regulation: India regulates prices of essential medicines but not all drugs. Many lifesaving therapies and newer biologics fall outside price control mechanisms, limiting the immediate impact of tariff cuts.
2. Supply Chain Costs: Cold storage, specialised transport, hospital margins and pharmacy mark-ups significantly influence final prices, especially for biologics and injectables.
3. Patent and Data Exclusivity: The trade deal does not automatically alter India's patent laws. As long as exclusivity remains, manufacturers can maintain higher prices regardless of tariff reductions.

Also Read: Ozempic Injection Price In India: How Affordable Is It For Diabetes And Weight Loss?

What the Deal Means for Indian Pharma and Public Health

The FTA is expected to strengthen India's position as a global pharmaceutical hub. Easier access to EU markets could boost exports of Indian generics and biosimilars, while technology transfer and collaboration may improve domestic manufacturing capacity.

From a public-health perspective, the biggest gains may come not from cheaper weight-loss drugs, but from:

Better access to advanced lifesaving medicines

• More stable supply chains
• Long-term cost efficiencies in healthcare delivery

The India-EU Free Trade Agreement opens the door to potential cost reductions in both weight-loss and lifesaving medicines, but it is not a magic bullet for affordability. While lower tariffs can ease import and manufacturing costs, patient prices will ultimately depend on patents, regulation, domestic competition and healthcare policy.

For Indian patients, the real benefits are likely to emerge gradually, through improved access, stronger supply chains and, eventually, greater competition, rather than immediate price cuts at the pharmacy counter.

Disclaimer: This content including advice provides generic information only. It is in no way a substitute for a qualified medical opinion. Always consult a specialist or your own doctor for more information. NDTV does not claim responsibility for this information.