Pharma Companies, over a period of last 25 years, have gradually started depending on China. Many companies started buying APIs. Even many API companies started buying advance intermediates from China. Initially low cost source availability was the main driver but later, many reasons added to the cause. API industries started buying advance intermediate to reduce their product development cycle, investment in facility for production of intermediate and avoiding the complex chemistry to handle in-house. This has also given short-cut to various product development teams. We, the Indian pharma companies, started filing the DMF’s in various regulatory markets with China as a primary source of key starting materials and intermediates, and indirectly locked ourselves for long-term association with Chinese companies. In addition to this, there was an outside pressure by various state governments for red category industries. There was an overall reluctance of producing key starting materials and intermediates in-house within India.
Initially, many Indian companies surely benefitted with this approach and worked very well during the last many years. However, gradually Chinese industries started facing the same problems which Indian industries had tried to avoid. Negligence of environment and safety standards started creating serious concerns within China. A recent major explosion was a serious episode in which many industries came under trouble. The immediate threat was the supply — many chemicals started getting delayed — and secondly, Chinese companies started loading the site upgradation / investment cost on the products and the cost of chemicals started increasing exponentially. This has eroded the initial advantage of low-cost source availability.
Another problem which many industries did not anticipate was constant enhancement of regulatory standards, and need for more and more data on key starting materials and intermediates. This has specially became major problem in getting the route of synthesis, impurity profiles, methods of analysis, etc for Europe and the US market.
In short, Indian pharma industries are in trouble from all corners unless they take quick actions during the next three to five years. The important part is to unlearn and unwind some of the strategies. Few important actions that need to be taken are:
- Immediately bring the development team in action to develop the process from basic chemicals and not from advance intermediates.
- Use novel methods of process development to reduce waste and reduce environment pollution to make in-house manufacturing feasible.
- Give impetus on manufacturing in-house or within India.
- Pharma industries need to request the government to dedicate certain zones for chemical industries and give quick environment clearance for taking manufacturing in India.
- Industries need to improve the workforce productivity to make sure that we do not increase cost of production significantly by taking the manufacturing within India.
- Start focussing on the regulatory filings by taking care that Indian source of manufacturing becomes an alternate supplier and slowly replaces the Chinese suppliers, phase wise.
It has become a necessity that every Indian pharma industry makes a long-term strategy, individually or clusterwise, to reduce dependency on Chinese supply of key starting materials and intermediates over the period of next few years. This will not only help in mitigating risk of surprises from China, but it will assure sustainability of Indian pharma’s growth story.