Dr Sanjay Chaturvedi, ED and CEO, IOL Chemicals and Pharmaceuticals stresses that as the Indian pharmaceutical industry continues to grow and mature, there is a need for specialised, high-quality Active Pharmaceutical Ingredients (API) manufacturing capabilities. This is essential for both strategic and business reasons
Currently, India has high import dependency on APIs from other countries, especially China. The country imports APIs worth Rs 35,000 crore each year from China, which is dominant in APIs and intermediates. The high dependence on imports makes the country vulnerable to supply chain disruptions and price fluctuations. The Indian API industry is currently at a critical juncture, with the government’s focus on promoting self-sustained API manufacturing in the country. Both, India and China have emerged as major players in the global API market, with a large pool of skilled labour and raw material reserves. The growing geo- political conflict between the West and China has pushed the global pharma majors to source more from countries other than China. Here, India’s emergence as the alternate source of bulk drugs has been quite remarkable and the overall scenario of ‘China+1’ strategy presents a significant growth opportunity to Indian players.
Self-sustained API manufacturing in India is steadily becoming more prevalent, with advancements in technology and market stabilisation. As the Indian pharmaceutical industry continues to grow and mature, there is a need for specialised, high-quality Active Pharmaceutical Ingredients (API) manufacturing capabilities. This is essential for both strategic and business reasons. This will give India a chance to capitalise on the plethora of opportunities offered by the global market, including increasing demand for value-added products.
The Indian API industry is currently at a critical juncture, with the government’s focus on promoting self-sustained API manufacturing in the country. To meet the demand for a robust and resilient API production in India, there are certain steps that are urgently required and the government has taken several pro-active steps to promote API manufacturing.
In order to create a cost-effective and reliable supply chain for the production of APIs, it is important for the Indian pharmaceutical industry to make investments in infrastructure, advanced technology, and quality control processes. This includes investing in high-end equipment for product formulation, testing, and packaging. To improve supply chain operations, the industry must establish clear and automated processes for tracking and monitoring Inventory, production planning, delivery schedules, and cost control measures. Furthermore, collaboration between producers and distribution networks is necessary in order to ensure that APIs are delivered to customers in a timely, efficient, and standardised manner.
In order to ensure robust and reliable delivery of APIs, companies should employ methods to reduce waste, optimize production, and reuse by-products. A modernised infrastructure will enable companies to scale up production quickly and easily. Companies should also invest in multiple sources of APIs and adopt working capital management practices that allow them to effectively manage stock and acquire necessary materials at a lower cost. Additionally, proper sourcing and pricing of raw materials is essential in order to produce high-quality APIs efficiently. Strategies such as long-term negotiations with vendors and bulk purchasing can help to reduce costs significantly.
Apart from these general strategies, companies should carefully study their supply chain and production process in order to identify areas for improvement. Automation and lean principles can be used to streamline and optimize production. Proper maintenance of equipment, including regular check-ups and replacements, is also essential for an efficient production process. Analytics can be used to identify trends and detect areas for improvement in order to reduce production costs. Companies should also analyse their production cycles to understand the impact of certain variables on the quality and consistency of their APIs. Finally, companies should ensure that they have a reliable system in place to monitor and detect any potential issues within the production process.
Here are some of the key steps being taken by the government and the industry to promote self-sustained API manufacturing in India:
- Production-Linked Incentive (PLI) scheme
- Setting up of API parks
- Technology upgradation
- Regulatory reforms
- Collaborations with global players
The road ahead for self-sustained API manufacturing in India looks promising, with the government and industry working together to promote domestic production of APIs. Many domestic players today are enhancing their capacities through rapid backward integration for producing Key Starting Materials (KSMs or intermediates).
India has already started the production of 22 active pharmaceutical ingredients (API) or bulk drugs used for the manufacturing of life-saving drugs under the Production Linked Incentive (PLI) scheme. With right regulatory support , impetus on research and development combined with trained, high-skill talent, India’s self-sustenance in API industry is poised for a significant leap.