Acute shortage of equipment faced by pharma companies and rise in APIs to affect drug availability during COVID: Infomerics

The report from Infomerics Valuation and Rating stated that while nearly 70 per cent of the country’s APIs are imported from China, the dependence rises to 90 per cent for certain life-saving antibiotics like cephalosporins, azithromycin and penicillin
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Indian vaccine manufacturers face a crucial shortage of equipment including small- and large-scale bioreactors and fermenters, a report ‘Pharma Industry: Trends and Prospects’ from Infomerics Valuation and Rating revealed. It also said that the steep 50 per cent rise in the cost of Active Pharmaceutical Ingredients (APIs) is pinching the industry hard and raises doubts on the availability of drugs and could lead to shortages, particularly of those that are key in COVID therapy.

The report also stated that while nearly 70 per cent of the country’s APIs are imported from China, the dependence rises to 90 per cent for certain life-saving antibiotics like cephalosporins, azithromycin and penicillin. Since these medicines are under price control, companies are forced to absorb the higher cost, raising questions about their viability. In this scenario, over time, certain medicines could disappear from retail shelves.

The report, though, is optimistic about the future of the sector. “Despite being wrecked by COVID, the pharma industry grew 37 per cent year-on-year and 15 per cent sequentially in Q1FY22. The growth was driven by sales of COVID treatment drugs and other drugs. The cost of manufacturing in India is approximately 33 per cent lower than that of the US. Therefore, the industry can benefit from these attributes and accordingly scale up production, productivity and efficiency. However, the realisation of this potential necessitates harnessing economies of scale to move to a newer and higher orbit,” it said.

The report also noted the wide-ranging ramifications of the liberalised Foreign Direct Investment (FDI) with 74 per cent FDI under automatic route in brownfield pharmaceuticals, Production Linked Incentive (PLI) scheme, which augur well for the steady growth of the industry.

APIsequipment shortageInfomerics Valuation and Ratingpharma companiesPLI scheme
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  • Kiran Kumar Merusomayajula

    Cost of APIs are increased due to cost of other materials like KSM, Solvents and reagents which are imported in large volumes from China. Entrepreneurs shall utilize the schemes providing by GOI to decrease the imports from China and start manufacture the KSMs, Solvents and intermediates nd APIs in India with low price and high quality. This boosts Atmanirbhartha and also increase employment and thereby development of the country.