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COVID–19 and its impact on India Pharma Inc

Juilee Dandekar – Sector Expert (Healthcare), Business Research & Advisory, Aranca, among other things, believes that India Pharma Inc should rework its business and growth strategies to completely leverage its deep expertise in the manufacture of drugs, highly skilled scientists, and low-cost manufacturing

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The Indian pharma sector is the third-largest in the world. It manufactures almost 60 per cent of the vaccines used globally, including important ones, such as those against diphtheria, tetanus, and pertussis required by the World Health Organisation (WHO). Furthermore, the country meets 90 per cent of the global demand for the vaccine against measles.
Millions across the world use generic drugs produced by Indian drug manufacturers. More than 250 factories in the country have been approved by the US Food and Drug Administration (FDA) as well as the UK Medicine and Healthcare Products Regulatory Agency (MHRA). These manufacture drugs for overseas markets, including the US and the UK.

India’s active pharmaceutical ingredient (API) industry is expected to generate $6 billion in revenues by the end of 2020.
Currently, generic drugs are playing a crucial role in the fight against COVID–19. India has been meeting more than 20 per cent of the world and almost 50 per cent of the US’s generic drug requirements. Unfortunately, Indian manufacturers rely heavily on China for key starting materials (KSMs), intermediate and APIs with China catering to nearly 70 per cent of Indian pharma companies’ requirements.

The Indian pharma sector is an important component of the global healthcare infrastructure and is instrumental in saving millions of lives every year. However, like all other sectors, it too has been affected by COVID–19 that has brought about various changes.

Trail of disruption

The COVID–19 pandemic has disrupted supply chains across the world. Every sector, including pharma, is suffering from supply chains coming to a grinding halt. Prices of raw materials have shot up amid limited supply, production schedules have been interrupted, factories have been shut down and shipping costs are sky-high in most countries. The impact on the Indian pharma sector is typically evident, given that most raw materials are procured from China, the epicentre of the outbreak.

With the movement of people and goods restricted amid lockdowns, manufacturers of generic drugs are unable to launch products or conduct clinical trials. As a result, timelines for drug filings have got stretched. Furthermore, cash flows from new generic drug launches have either