Industry stakeholders share their views and concerns about the challenges and impact of the coronavirus pandemic and the nationwide lockdown on the pharma sector
The Indian pharma industry, known as the ‘Pharmacy of the World’, exports to over 200 countries. But, the novel coronavirus (COVID-19) pandemic has caused a lot of roadblocks for the sector, especially at a time when a lot is expected of the sector to deal with the pandemic. Though the sector is exempted from the lockdown as it is considered part of essential service providers, it is affected due to the restrictions placed on other sectors like logistics and transportation. The sector is worried on various fronts such as the impact of the pandemic on its bottom lines, logistics issues, loss of valued clients, absence of workforce, loss of credibility, penalties for delayed supplies, huge demurrages etc. But, the industry is also committed to playing their role in tackling the health crisis which has taken the world hostage and expects the government to help them tide over in times of this crisis.
‘There are constraints in receiving raw materials and packing materials for manufacturing due to transport restrictions’
As the pharma industry comes under essential services, we need to ensure that our manufacturing units are running and the products are distributed to the pharmacies through the logistics channels. However, under the current circumstances, when people are reluctant to step out of their homes due to fear of getting infected by the coronavirus, it is becoming extremely difficult to get workmen and pharmacists to work in our manufacturing plants.
Another issue is that there are constraints in receiving raw materials and packing materials for manufacturing due to transport restrictions. Even when the finished goods are produced, there is another problem in transporting the same to various states. There is a risk that many of the goods may be get stuck at various borders and check posts due to restrictions.
The pharma industry needs to overcome all these challenges and keep the production and logistics moving. I only remember the quote that “when going gets tough, the tough get going”. We, in the pharma industry, are trying very hard to keep up supplies for the common man. Again, with respect to exports, there are problems in getting containers to move to the port and the customs are not fully operative. Import clearances from the ports are delayed as well.
We are affected by cash flow due to the above factors and our concern is that we need to meet our primary obligations of paying salary to all our employees besides other expenses. Many of the employees need to be paid without working.
I suggest that the Government should provide three months’ salaries for the company as a loan without interest so that we can meet our salary obligations.
With the reduced inflow of cash, there is also a likelihood of profitability getting hit in a big way and we are worried that the loss might be too much to withstand. Although the Government has initiated some moves to ease-out cash flow and liquidity, the results of the efforts are yet to be seen.
– S V Veeramani, Past President – IDMA and Chairman & MD, Fourrts (India) Laboratories
‘Most pharma units are operating between 50 to 70 per cent and this will impact the bottom lines’
It is a very tough time to manage pharma operations even though the government has given permission to run the industry under emergency services. Fortunately, most of the companies might have 30 – 60 days’ inventory of critical raw materials for manufacturing but there are concerns like packing materials availability, manpower mobilisation and care, logistics etc. Despite a lot of difficulties, the industry is managing to run its operations with government support and employees’ ownership.
Pharma exports are also a concern as they will cause a huge impact on supplies. Firstly, due to export restrictions on some products and secondly, due to low productivity and logistics delay. These might lead to a lot of penalties and cause bad impressions. The government can consider exporting these products from ‘Export only units’ where these are all manufactured for exports only and they are not used for the treatment of the coronavirus-affected patients. The government can conduct technical evaluations and exempt some products on high priority.
Particularly, since most of the pharma units are operating between 50 to 70 per cent and this will impact the bottom lines.
– M Madan Mohan Reddy, Director, Aurobindo Pharma
‘Pharma industry is presently going through a crisis due to absence of trained working professionals and labour force’
The feed for pharma manufacturing in terms of availability of APIs, personnel, transportation have reduced, thereby hampering manufacturing activity. Currently, the scene is management by crisis, by convenience or by escapism.
Thus, the pharma industry is presently going through a crisis in terms of the absence of trained working professionals and labour force. There is a heavy backlog in terms of distribution due to non-availability of transportation. The movement of required inventories in the packing material and others is very slow.
The pharma industry has not been able to export those orders received before the pandemic due to restrictions placed by authorities and the CDSCO.
The pharma Industry is also incurring losses in outgoings such as salaries of their field force without any sales or diminished sales. However, pharma sales have shown a steep rise in antibiotics, vitamin C, analgesics, antiretrovirals and anti-inflammatory agents, hand sanitisers, masks and regular antihypertensives, anti- cholesterol and anti-diabetic products.
But, these are confined to only select companies. Others, who do not manufacture these, are waiting for the lockdown to be lifted without knowing when the clouds will clear.
Among the hardest hit are the MSMEs who may not be able to sustain their operations as their cash flow will be hampered and they do not have enough savings to bank upon to tide over the situation.
Some measures that pharma companies, large and small, will have implement include:
- Decreasing their inventories
- Reducing the product profile
- Optimising their field operations to reach the medical fraternity
- Reducing travel expenses
- Going into digital promotions for products and save on meetings by going digital.
- Encourage doctors to be pragmatic about their prescriptions and avoid brands with irrational FDCs.
- Promote API requirements from domestic suppliers instead of imports from wherever, saving foreign exchange and promoting local companies.
- Be pragmatic in pricing their products as the inputs are going to be costlier, thereby decreasing profit margins.
The NPPA, DOP and CDSCO should take the above factors kindly and encourage manufacturers to restore their businesses by handholding them wherever necessary. These should be carried forward in the larger interest of the country and masses.
We are all under house arrest, and the global economy is throttled. The throttle has to be released through pragmatic solutions and actions. But, we see a bright future for INDIA. Make in India will help not only our healthcare industry to flourish but also other manufacturing sectors. Thus, we can unleash India’s true potential which wasn’t being optimised earlier.
Our IDMA team is in touch with different government authorities to signal various measures to act with imagination and speed in required parameters.
– SR Vaidya, Director, Bliss GVS
‘All our factories are under strict protocols of hygiene and bio-security to protect those on the factory frontline’
The announcement of the 21-day lockdown in India was a curveball that few anticipated. Along with the unforeseen disruptions within the supply chain, there were challenges in getting the workforce to work.
ACG took a very methodological approach in resolving these challenges. As a crucial supplier to the global pharma industry during this time of medical crisis, ACG Films and Foils has been doing everything in its power to provide an uninterrupted supply of products and services. As a result, a couple of days back, we received all relevant permissions, and our products and services have been classified in the Essentials category by the government. As of today, ACG Films & Foils factories across India and the globe continue at full capacity, and all orders are being fulfilled – so we can continue to meet the increased demand, and support people’s health and wellbeing worldwide.
We are also taking all possible measures we possibly can to safeguard the wellbeing of our workforce. All our factories are under strict protocols of hygiene and bio-security to protect those on the factory frontline. These measures include the daily screening of workers with thermal scanners before entering the company premises, following strict social distancing rules within the workplace, easy access to sanitisers across the factories and company vehicles, daily sanitising of vehicles including buses and delivery vans, regular awareness sessions by doctors, and easy access to personal protective equipment (PPE). These measures are being continuously reviewed for its alignment with various health advisories as well. We salute the spirit of our workforce who report to work every day and keep up to meet the increased pharma demands of the world.
In addition, the leadership team of ACG has also been convening every day to enable timely decisions, allocation of resources, and activation of the contingency plan, in case required. Under the current situation, our only priority is to focus on business continuity and to partner with our customers and suppliers in meeting the increasing pharma demands. We are not looking at our P&L sheets right now. Today it’s much more than profitability. We have committed to our clients, and to honour the commitment is our only objective.
– SR Shivshankar, CEO- ACG Films & Foils