Tough times for import dependent pharma firms

The raw material stocks, as of now, might last for two to three months and beyond that it will be difficult as many firms depend on China for the raw materials.

By Author  |  Published: 28th Feb 2020  12:35 am
pharma firms
Illustration image of COVID-19 created at Centre for Disease Control and Prevention, US. — Photo: AFP

Hyderabad: Hit by the outbreak of COVID-19 and subsequent disruption in the supply chain, the Indian drug industry might see an increase in prices as well as lower exports. The raw material stocks, as of now, might last for two to three months and beyond that it will be difficult as many firms depend on China for the raw materials.

“Many firms will suffer if the supplies from China do not resume soon. Many importers have stocks that will last for two or three months. But once they are exhausted, they will find it difficult,” said K Narayan Reddy, former president of Bulk Drugs Manufacturing Association (BDMA).

Hyderabad is home for many pharma companies and accounts for more than 35 per cent of India’s drug manufacturing. Finding new suppliers and the associated higher costs will hit the pharma companies, he said.

“India has the technical capabilities to make raw materials or active pharmaceutical ingredients locally. We should start focusing on that,” he said.

According to him, many Indian firms did not focus on alternatives since China offered to supply the raw materials at a lower cost. The dependence on China is so grave that no other country is producing Penicillin G, which is used in antibiotics.

“Government has written to some firms asking them not to increase the prices of the drugs in view of the shortage. Price is one thing but their availability is more important,” he said.

Jayant Tagore, former president of BDMA, said that it might take more than four weeks for the imports to resume. “There is no panic situation right now. Domestic supplies will be ensured by cutting down exports if need arises,” he said, adding that pharma industry is suffering from misinformation campaigns.

Virus outbreak hits Indian drug manufacturing sector

Hyderabad: The outbreak of COVID-19 in China and its gradual spread to nearly 37 countries around the world is now threatening to impact medical device and drug manufacturing sector in the country. According to several projections from agencies, supply of raw materials needed to manufacture drugs and medical devices in India are likely to take hit in the coming months. China is a major supplier of Active Pharmaceutical Ingredients (APIs) needed for the manufacture of drugs.

Apart from drugs, sector experts have said there is every possibility of shortage in medical devices and equipment due to scarcity of raw materials from China. The supply lines of these raw materials will not sustain for long because the geographies of the spread of the ailment are ever-expanding, experts said.

On their part, the members of Medical Technology Association of India (MTAI), which represents leading-research-based medical technology companies in the country, maintain that its member companies are ready to brace-up and meet the demand for any kind of shortage in medical devices and equipment arising due to the COVID-19 outbreak.

Experts familiar with the medical devices industry said that due to shortage of raw materials from China, there may soon be a scarcity of commonly used medical devices like digital thermometers, infrared thermometers, nebulizers, blood pressure monitors and glucometers manufactured in India.

According to MTAI, a majority of its members do not depend on imports from China. In the last few years, there has been a concerted effort from Indian medical devices manufactures to import raw materials from Europe and United States, instead of China.

“Our members are trying to offset any supply gaps arising out of the import shortages from China. The member companies’ products conform to the highest quality standards and are imported primarily from USA, Europe and Japan or manufactured under strict quality control in India,” says Pavan Choudary, Chairman, MTAI.

India major importer from China

According to reports, India imports close to 10 billion USD worth of pharmaceutical and organic imports from China. The bulk drug i.e. raw materials for manufacturing drugs of API imports are close to 2.5 billion USD.

The widespread outbreak of COVID-19 in China has resulted in closure of many API manufacturing units, which has become a cause of concern for Indian sector. To tide over the crisis, memebrs of NITI Aayog had met sector experts including Kiran Mazumdar Shaw of Biocon and other senior industry representatives to come up with alternative plans to tide over the crisis.

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