China’s recovery from COVID-19 should not tempt us to take the easy way out again

One silver lining of the COVID-19 infection is that policy decisions have been fast tracked
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India’s count of COVID-19 cases as on April 6, 09:00 am stood at 3666 active cases, with 291 cured/discharged, 109 deaths and one migration. Globally, COVID-19 positive cases have crossed the one million mark. While there are some countries where the new cases added per day are less than the cured/discharged cases – showing that the virus may be petering off – there are other countries like India which have not yet reached their peak.

Governments and companies are working on two fronts: containing the infection as well as preparing for post-COVID-19 scenarios. But it’s clear that it will be a new normal.

One silver lining of the COVID-19 infection is that policy decisions have been fast-tracked. The government has been deliberating a bulk drug policy for years but it kept getting postponed. As China shut down to cope with COVID-19, our supply of active pharmaceutical ingredients (APIs) and key starting materials (KSMs) reached dangerously low levels. Policymakers swung into action. On March 21, the union cabinet chaired by Prime Minister Narendra Modi approved a stimulus package for the pharma sector focusing on bulk drugs, APIs and KSMs.

The package included Rs 3000 crore for the financing of common infrastructure facilities in three bulk drug parks. The second initiative has set aside Rs 6,940 crore for next eight years as part of a Production Linked Incentive (PLI) scheme for the promotion of domestic manufacturing of 53 critical bulk drugs on their incremental sales over the base year (2019-20) for a period of six years.

The government is clearly incentivising manufacturers to take up fermentation-based bulk drugs, as the rate of incentive will be double (20 per cent of incremental sales value) for the 26 fermentation-based bulk drugs and 10 per cent for the 27 chemical synthesis based bulk drugs.

The government also asked the Ministry of Environment, Forest and Climate Change (MoEFCC) to expedite prior environmental clearance to projects related to APIs/bulk drugs and intermediates so that India can start being self-sufficient in these materials related to COVID-19. (https://www.expresspharma.in/latest-updates/government-asks-moefcc-to-expedite-clearance-of-api-intermediates/).

But these measures will take time to bear fruit. Especially as pharma manufacturing in a nation-wide lockdown has to contend with reduced manpower due to physical distancing and lack of input materials from ancillary industries.

Meanwhile, China seems to be recovering from the COVID-19 shutdown. Overall, the current Chinese API production levels are at 80 per cent of normal levels and volumes of those with potential to fight COVID-19 were already higher than year-earlier yields, according to Xin Guobin, deputy minister of industry and information technology. Speaking at a press conference arranged by China’s State Council Information Office, on March 30, Xin described the country’s production at the two major producers of the API chloroquine phosphate as “stable” and said one of them, Chongqing Kangle Pharmaceutical, had managed to export 4.9 tons of the API in five days. This is significant as chloroquine phosphate has been shown to be effective against COVID-19 and is therefore in high demand across the world.

According to a report from Inframation, an Acuris company, the Chinese government is relaxing regulations to encourage private participation in an infrastructure boom that could total investment of more than CNY 25 trillion ($ 3.6 trillion) over the coming years. The projects include 5G infrastructure (particularly telecom towers), ultra-high-voltage transmission lines, smart city projects, high-speed inter-city railways and data centres. Social infrastructure, particularly healthcare, including hospitals, nursing homes, elderly care centres, schools and social housing rehabilitation projects, was highlighted as another focused sector for new projects. The report points out that this ‘will open a rare window of opportunity for global private infrastructure investors’.

Thus there is no doubt that China plans to recover its place as the world’s manufacturing hub for almost everything under the sun, including APIs and KSMs, before other countries put in place alternative suppliers and start manufacturing themselves. China’s recovery from the COVID-19 shutdown should not tempt us to take the easy way out and rely once again on external sources for life-saving medicines. Let us hope that the incentive package cleared by the cabinet works as intended and we emerge from the COVID-19 cloud with more APIs and KSMs manufactured within our country. 

APIChinaCOVID-19Express PharmaIndia Pharma IncViveka Roychowdhury
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  • Santosh

    Dear Dr Viveka,
    Nice article!! I think, Indian Pharma and API and KSM manufacturers should take the advantage of this situation. But, government;s red tapism should be curtailed. As state FDA’s are still asking for lots of documentation and clarification though central policy trying to put the things on fast track.