At a time the drug industry is grappling with the coronavirus pandemic, India’s pharmaceutical companies are likely to confront a replacement challenge as China has raised prices of key starting materials (KSMs), which are the building blocks for drugs, by up to twenty per cent, leaving those of active pharmaceutical ingredients (APIs), which are the raw materials accustomed make medicines, largely unchanged.
More importantly, over the last 45 days, the RMB rose 4 per cent against the dollar. Chinese companies are said to be functioning through a cartel and manoeuvring KSM prices for steroids and antibiotics, a Mumbai-based executive who deals in bulk drugs told the daily. Indian Drug Manufacturers’ Association president Mahesh Doshi said, “Cost pressure are visiting be there (on API manufacturers) because of the increase in prices of imported KSMs.”
The Centre’s production-linked scheme for drugs, which is aimed toward cutting dependence on Chinese supplies, proposes to supply support to plug domestic production, but involves massive investments from firms, particularly for the much-needed fermentation-based products.
The Indian pharmaceutical industry is that the world’s third-largest by volume and 13th largest in terms useful . The industry generates over $11 billion of trade surplus every year and is amongst the best five sectors contributing to the reduction of India’s deficit . Imports from China are on a mild rise over the years (from 62 per cent in FY12 to 68 per cent in FY19) as India imported Rs 169 billion worth of intermediates and APIs from China, in line with a CII release issued in April this year.