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Restrategising to survive and thrive

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Anwar Daud, Managing Director, ZIM Laboratories gives an overview of some measures that the government and the industry needs to take to overcome the current crisis and become future-ready

There are some urgent actions that need to be taken for the pharma sector in addition to the welcome spate of relief measures announced for all sectors relating to statutory compliances and making available additional funds to the industry in general through various means. The government certainly is moving proactively and speedily. It is likely that by the time you see this, many of these suggestions would have been implemented in some form or other

Logistics and supply chain

Kickstart the supply chain. Arrange the movement of APIs, intermediates, excipients and packaging materials from their manufacturers/distributors’ premises and warehouses especially from hubs like Mumbai, Hyderabad, Ahmedabad Chennai, Indore etc. to the consuming industry sites so that industry wheels can start moving. This can even be done by facilitating police/paramilitary escorts in caravan mode to ensure distancing as well as non-harassment during frequent blockages they encounter while crossing state boundaries.

Similarly, moving finished products as well as APIs etc. lying in factories which do not have government restrictions awaiting exports should be immediately facilitated for dispatch.

Utilise the grounded passenger planes as cargo carriers for transporting critical pharma and medical supplies within the country and also exports through international cargo flights.

Re-starting of the movement of domestic and international couriers with all safeguards.

Financial measures

The financial support already announced in general should be boosted with an immediate disbursement of GST and other export-related due incentives. The Industry has been urged to continue paying salaries and wages despite the closure of operations and absence of revenue. A soft loan against salary bill for the next 12 months can be provided to the pharma MSME sector to be directly transferred in the employees’ bank accounts. This soft loans should be in addition to other government initiatives with a suitable moratorium to be re-paid by the pharma MSME employer in the next five years as situation normalises.

Business support

In this hour of crisis, the government should become the biggest buyer and distributor of Indian pharma industry’s products. It needs to re-capitalise all the pharma and medical supply state procurement agencies along with large pharma institutional buyers, such as the Railways, GMSD, ESIC, the Jan Aushadhi chain etc., so that they can aggressively place orders and make early payments to the eligible pharma and medical supply MSMEs in preparation for the huge rebound of general healthcare requirements including medicines, medical devices, chemicals diagnostic kits etc., the moment situation starts normalising. This will be a much-needed boost for pharma MSMEs wishing to revert back to their original business volumes as their disrupted export sales will take at least a year to revive.

The Indian government could also enter into large contracts with the government of other countries who would be also in dire need of medicines as they, in turn, come out of their COVID-19 crisis. It can act as a central procurement agency for eligible pharma MSMEs and act as an aggregator and exporter (a role that STC used to play earlier) so that some of the supply chain related complications and business risk of the smaller players can be ameliorated.

Reducing our dependency on intermediates and APIs on China

The government has been very proactive and various incentives have been provided to pharma industry for achieving self-sufficiency in manufacturing important APIs and intermediates.

However, our strategy needs to be highly nuanced and the right approach should be to concentrate on only a few important APIs which significantly impact the healthcare requirements of a large percentage of our population.

Only a few such molecules for each therapy segment should be selected. We should think through in detail on creating viable capacities for these selected molecules, starting from their primary building blocks to the intermediates to APIs such that these can be sold to the Indian formulators at prices equivalent with that of China.

It’s not just China that the World does not want to be overly dependent on in future, it is India as well. There is general consensus that the post COVID-19 world will accelerate localisation (import substitution) and affordability, fed by an urgent need to create local employment as far as pharma manufacturing in India’s various export markets is concerned. These are strong headwinds for India’s export markets.

The lockdown has affected our reputation as a reliable supplier of affordable formulation and some of our APIs where we are competitive. There is already a movement for localisation in several of India’s pharma export markets. Further, several countries have risen as worthy competitors to India in the last few years such as Bangladesh, Indonesia, Turkey etc., and any attempt at import substitution of Chinese APIs which results in the increase of prices of our pharma finished goods in the international markets will be disastrous.

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