As India Pharma Inc reels under the far-reaching impact of the coronavirus epidemic, industry experts suggest policy reforms to insulate the sector and improve its emergency-preparedness By Usha Sharma
The novel coronavirus pandemic (COVID-19), which began with an outbreak in China, has killed over 4,990 people worldwide and the death toll is increasing constantly. With over 120 countries affected by the virus, this threat has put a dent on the global economy as well. The COVID-19 pandemic’s impact on India Pharma Inc too will be mammoth in stature.
One of the most signifcant impact will be the lack of availability of key raw materials for the pharma industry. Presently, the Indian pharma companies who lead the global generic business markets are largely dependent on China for up to 90 per cent of their APIs imports, and they stock a maximum six months worth market requirements. The Indian regulatory agency anticipates that 50 plus APIs of crucial antibiotics, vitamins, and hormones or steroids could go out of stock in case of a prolonged lockdown in China. Also, the sector is already witnessing a rise in prices of several key ingredients which will certainly disturb product availability in the market.
According to Pharmaceutical Export Promotion Council (Pharmexcil) reports, there has been a rise of nearly 40 per cent in the cost of paracetamol from Rs 250-300 kg to 400-450 kg. ‘Montelukast sodium’ (an anti-asthma drug) is now trading between Rs 52,000 – 58,000 per kg, compared to Rs 33,000-38,000 per kg a few months ago. Similarly, the prices of vitamins and penicillin have increased by 40-50 per cent and the majority of the vitamins are trading at double or triple the original price. The cost of azithromycin – an antibiotic used for curing various bacterial infections – increased by 70 per cent. The companies may end up exhausting most of their stock of active ingredients for high-demand drugs like paracetamol and ibuprofen in another two to three months. There are also fears that an artificial shortage of essential drugs might get created in the market.
All these factors have pushed regulators and government authorities to hold several brainstorming meetings with pharma stakeholders. For instance, last month the central government formed a committee to monitor the availability of drugs in India. The committee, led by Joint Drugs Controller Eswara Reddy subsequently asked drug-makers across India to inform the government if they required urgent ‘pick-ups’ from China. To this, Cipla wrote back with a requirement of six tonnes of raw material primarily comprising of active pharmaceutical ingredients (APIs) and key starting materials. Following this request, the central government promised to help Cipla import cargo weighing six tonnes from China, most likely by a flight run by Cathay Pacific from Hong Kong at the earliest.
Thus, the authorities are trying to tackle these challenges but the situation has reiterated how important it is for India to become more self-reliant. Though 2015 was declared by the Government as ‘Year of Bulk Drugs’, unfortunately nothing concrete happened on that ground. After that too, several attempts have been made by the pharma industry to make India self-reliant at the API front. There were also concerns that political relations between India and China and the trade wars between US and China could affect the pharma industry adversely.
However, there are hopes that this crisis will offer some silver linings in the form of learning opportunities and expedition of policy reforms. This, in turn, can eventually boost the process of India becoming more self-sustainable. In this light, industry stakeholders share their views on how COVID-19 may prove to be a turning point in the Indian pharma industry.
‘Need to adopt a strategy to make India self-sufficient in KSMs, intermediates and APIs’
In terms of imports from China, India is vulnerably dependent for imports of key starting raw materials (KSMs) like Penicillin G, 6APA, 7ACA and lot of APIs. In all 600 such molecules are being imported in India out of which 58 are imported from China only and out of 58, 12 are imported from Hubei province where Wuhan Coronavirus
affected city is located. We’re confident through our suppliers and sources in China that areas in access of 500 km from Wuhan City will start dispatching KSMs and APIs in two to three weeks. Wuhan city might take eight weeks or thereabouts to bring about a semblance of normalcy to some extent. Therefore, 16 molecules will be affected to a larger extent such as certain antibiotics like Chloramphenicol, Erythromycin, Azith-romycin, Clarithromycin, Amoxicillin, Vitamins A B, E & C & E, hormones like Progesterone, Metronidazole etc.
India may have to go slow on exports of formulations based on these molecules so as to ensure adequate supplies for India irrespective of other international commitments. In case of such commitments to the foreign suppliers, force majeure clause can be initiated.

Chairman, Entrepreneurship & Startups, CII North India, CEO and Director, Nectar Lifesciences
COVID-19 is a wake-up call for India and we need to adopt short, medium and long term strategy to make India self-sufficient in KSMs, intermediates and APIs. As a short term measure, GoI may incentivise MSMEs and certain large companies which were earlier API producers but stopped producing on account of Chinese companies dumping at the below variable cost. With new scenario, they can be incentivised to restart old plants which were shut down. Assessments can be made through DoP and Ministry of Commerce, Pharmexcil, IDMA and other recognised bodies to ensure that genuine manufacturers are incentivised.
As midterm measures, existing clusters in states like Telangana, Andhra Pradesh, Maharashtra and Gujarat should be fast-tracked in terms of manufacturing KSMs, intermediates and API’s on SOS priority basis on China parity both in terms of financing at Libor + 1.5 per cent and non WTO conflicting incentives to promote manufacturing for APIs at reasonable profit and RoI approximately 10 per cent or thereabouts. Clusters may be expanded from current size 100-200 acres to 500 acres wherein in China clusters are in region 4000 to 5000 acres with complete assistance from the Chinese government both in terms of moratorium on interest for five years, as well as various incentives to promote exports andself-sufficiency for the domestic market.
A suitable work plan can be provided to GoI for this purpose as a long term measure. Keeping in mind the long term objectives, a moratorium period for the first five years should be provided on principal and interest. With significant volumes and ascendancy over China all over the world, both interest and principal can be paid off and became larger suppliers of all these three verticals not only for domestic sufficiency but also for current exports $22 billion estimated in 2021 can go to $50 billion or more in the next four to five years.
“We have a chance to improve the Indian API sector in the coming years”
Although the Indian pharma industry has an edge over China in production of pharma formulations for domestic and international markets, India still needs the support of China for the supply of a good number of APIs and intermediates for making the formulations.
Due to coronavirus impact in China, there have been delays/suspension of supply of APIs to India, which are very important for our formulations, particularly, antibiotics, hormones and vitamins. At this point of time, it has become difficult to estimate how long this situation is going to continue.

All along, the Indian pharma industry has been requesting the government for providing supportive measures for the development of API sector in India to compete with China. Although the intention of the Government has been positive, the response has been slow. The year 2015 was declared by the government as ‘Year of Bulk Drugs’, but nothing concrete happened on the ground. Now, due to the impact of coronavirus, leading to a possible shortage of medicines, the Government has come into full gear to look at the possibilities of boosting the Indian API
sector.
The government is also considering clearing of bottlenecks for getting quicker environmental clearances. If the
government is able to announce a package quickly for the existing as well as the new API industries, in the form of soft loans, capital subsidy, power subsidy, interest subsidy and other support, besides speedy environmental clearance, we have a chance to improve the Indian API sector in the coming years, although it may not meet the immediate requirement due to paucity of time. To meet the immediate requirements, we need to consider imports of raw materials from non-affected areas of China as well as doing any short term measures to increase the production of APIs in India. A short term measure for API production can be in the form of lifting environmental restrictions and allowing Indian manufacturers to produce any raw material if they are within the the approved pollution load.
“Old PSUs should be revived to produce antibiotics like Pen G”
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