Strategic short term measures needed on the API front: Pharma experts

Experts feel that a multi-pronged strategy comprising both, short term and long term measures, are crucial to deal with the fall out of the COVID-19 pandemic as well as mounting friction between India and China
Read Article

As tensions between India and China escalate, the trade relationship between both the countries is also likely to get strained. The Indian pharma industry, which is considerably dependent on China for the import of active pharmaceutical ingredients (APIs), may get adversely impacted. Though the Indian government is initiating certain steps to reduce the industry’s dependency such as setting up bulk drug parks and production linked incentive (PLI) schemes, the outcome of these measures will not be clear for at least two to three years.

Moreover, as a result of the coronavirus pandemic and the subsequent nationwide lockdown, the industry witnessed a significant rise in API prices from January 2020 to April 2020. For instance, the prices of per kg of azithromycin, hydroxychloroquine (HCQ) and Oseltamivir increased from Rs 7200 to Rs 16,000; Rs 7800 to Rs 75,000; and Rs1,00,000 to Rs.1,70,000, respectively.

Therefore, industry stakeholders, share their views on the short term measures needed to tackle the situation until the long term plans start delivering the desired results.

Harish JainSecretary, Karnataka Drugs and Pharmaceutical Manufacturers Association said, “Any escalation in tension with China leads to an immediate fall out on the API front. API availability is of strategic importance to us, not only for exports but also for the health and well-being of the 135-crore population of India. We cannot have a nearly $40 billion industry dependent on the import of APIs and KSMs from a hostile country.”

He continued, “It is time to develop a multi-pronged strategy quickly. It is to the credit of the present government, that it has imparted the due importance to this issue. But we need to work on a war footing. On a short term, we need to improve the capacities of existing domestic players and also develop alternate vendors globally who can compete with China. Our long term solution lies in end-to-end manufacturing within the country by using the best of technologies and processes. Pharma parks, ease of doing business, targeted incentives are the need of the hour. It has been said since long that it takes about three years for project implementation. The key is to start quickly so that in three years we are there, otherwise, we will spend the next three years only discussing.”

Dr Rajesh Gupta, All India Head, Laghu Udyog Bharati – Pharma Wing and President of Himachal Drug Manufacturers Association stated, “On September 25, 2018, during an Indian Drug Advisory Forum meeting, we had submitted our proposal about forming the API Monitoring Cell to curb malicious activities in APIs and excipients business, to decision making officials from government bodies along with representatives of pharma associations. At that time the authorities agreed with our proposal but till now they have not finalised the committee members or formed a formal body. However, assessing the market situation and the need for the API monitoring cell, in Jan 2020, we again discussed this with Dr PD Vaghela, Secretary, Department of Pharmaceuticals, along with key representatives from the NPPA. Dr Vaghela had assured us that the government is thinking of making the API monitoring body.”

Pointing out the relevance for an API Monitoring cell in the current situation, he said, “Understanding the tensed border situation between India and China, some of the traders from India have already increased the prices of key APIs. For instance, prices of some key APIs, from the pre-COVID-19 times to the current times i.e. during COVID-19, jumped between 20 -700 per cent. The government can examine the prices to ascertain the facts. If this continues in the future too, then it is likely to see its impact on finished formulations as well. However, if we had the API monitoring cell in place, then the authority could have assessed the capabilities of manufacturing APIs in the domestic market and the total need for API imports from China. It could have also prevented black marketing of APIs in such a critical situation.” He added, “If we make the monitoring cell then all the import items and genuine buying from China can be monitored.”

BR Sikri, Chairman FOPE, and Vice President. BDMA commented, “Every problem has a solution and our Government is competent and capable enough to resolve any issues. If such a situation arises wherein China slows down dispatches or discontinues supplies, the Government of India has to take the following measures immediately:

  1. Create a monitoring cell to coordinate with suppliers and Indian manufacturers
    2. Advise Indian buyers to preferably source such products, if available, from alternate sources in Europe or other countries
    3.Monitor price patterns so that importers do not hoard such molecules, because this will affect the patients at the end of the day in pricing
    4.Advise NPPA to monitor purchase patterns of each molecule and if required, to give a breather to the industry by way of increasing the prices of various products
    5. Consult with the doctors’ community to switchover the prescription to other therapeutic categories so that antibiotics and cephalosporins are prescribed to the minimum extent possible.
    6. Implement API Park projects on war footing basis so that non-availability of products in the market is minimised
    7 Create a task force to monitor the implementation of API Parks on priority. The task force should have the authority to give all clearances on a single-window basis. Nominees from every important department along with representatives of the industry should be part of this Task Force to ensure linkage between the government’s departments and investors.”

Viranchi Shah, National Vice President, IDMA-GSB said, “We need both-immediate actions and a long term action plan, as soon as possible. We should take steps to stimulate the existing API industry by addressing environmental clearance issues and giving additional economic support so that they can ramp up their production and add new products as quickly as possible. Further, API availability and prices can be monitored by the National Pharmaceuticals Pricing Authority (NPPA) and Price Monitoring & Resource Unit (PMRU). However, these steps can have a short term impact. For the long term, API policy implementation must be speeded up and timelines must be set and adhered to so that in the next two to three years we can be self-sufficient.”

SV VeeramaniCMD, Fourrts India Labs and  Former, National President -IDMA believes that there is no immediate impact on the pharma industry due to border issues between India and China. He said, “As of now, imports of API from China is continuing. It is premature to think that our supply will be affected due to the border situation. In the meantime, the government is keen on bringing self-sufficiency in APIs and is planning the PLI scheme. In some time, this will be fulfilled to a good extent. As of now, API prices are fluctuating due to the COVID-19 situation and there is no black marketing. This will pass.”

However, he also stated, “To tide over any possible shortage, the Government can ensure quicker environmental clearances to the current brownfield units so that they can change their product mix in order to shed obsolete products and replace them with products in demand. A separate financial scheme for brownfield units can also be considered to improve viability.”

Milan R PatelChairman, IDMA-Gujarat State Board (IDMA-GSB) and JMD Troikaa Pharmaceuticals said, “Many of the APIs currently imported from China were being made by Indian companies. Domestic players stopped production due to unfair pricing from China. These can be easily identified and Indian companies can be asked to restart the manufacturing process. This can be done in a few months. But the government should ensure that the true costing, both for APIs and formulations, are compensated. Because these real prices have not been considered whenever prices for the NLEM products were fixed by the government.”

He recommended, “Currently, we need a fast-tracked measure, let’s identify other manufacturers. There would be manufacturers other than China, whose products would not be registered in India as of now. The reason again is the same -due to unfair Chinese competition. These products should be fast-tracked in the registration process. Though the prices will go up to some extent initially, we would be freed from the blackmailing threat of China.”

Kuldeep Gupta, Secretary-General, FIDMI, and Director, Vivek Pharmachem said, “Only giving a space i.e. launching of the parks will not serve our purpose. Tomorrow, we can’t be competitive due to so many reasons such as an irrational taxes structure or lack of support from the government against Chinese products. Unless the Government does some long term planning for the Indian industry’s survival, nobody will come forward to invest Rs 10-100 crores.”

Kaushik Desai, Pharma Consultant opined, “The dependency on China for KSMs, antibiotics and many APIs is known from the past several years. It is not a new phenomenon to the Government or to the industry. This matter has been dragged for so long. The COVID-19 pandemic and rising tension between borders has brought this issue to the forefront and has become a matter of priority. The government has formed the task force and after much deliberation, has identified the KSMs and APIs which are to be taken up on priority for indigenous manufacturing. States like Telangana, Haryana, Gujarat and Himachal Pradesh have already initiated allocation of land for bulk drug parks. The time has come for the industry to take advantage of this initiative and start building facilities. On the other hand, the Government needs to come out with tax incentives and other clear supporting measures like early clearance from respective Pollution Boards and other agencies for companies to start putting up facilities for the identified bulk drugs and KSMs. There could be special incentives for companies who start manufacturing within one year and so on. Such incentives will encourage companies to come forward. The ever-increasing cost of energy and infrastructure shall not be a hindering factor. At the same time, India shall look for alternative sources however it appears a little difficult in current times considering the price factor. Unfortunately, the prices for finished formulations are monitored but not so much for bulk drugs. The efforts and support of the Government should be continued even after the COVID-19 pandemic. There is a need to have uniform policies across the States to make the dream of becoming independent in bulk drugs within a span of two to three years. It is expected that a separate task force comprising all stakeholders, exclusively for the API industry, will continue to monitor and take timely steps, as and when needed, to make India self-sufficient and become a globally recognised force.”

A clear picture on the border issue as well as the trade relationship between both countries might emerge after the scheduled virtual meeting of all political parties, called by PM Modi on June 19, 2020.

API self relianceBDMABR SikriDr Rajesh GuptaFIDMIFOPEFourrts India LabsHarish JainHDMAIDMAKarnataka Drugs and Pharmaceutical Manufacturers AssociationKaushik DesaiKuldeep GuptaLaghu Udyog Bharati - Pharma WingMilan R PatelSV VeeramaniViranchi Shah
Comments (0)
Add Comment