CHINA START HURTING !!!
If China catches cold, India will sneeze. That is exactly what is India witnessing in the case of pharmaceutical industry. Chinese government’s crackdown on polluting industries, including producers of APIs, has left the Indian pharma industry literally in the lurch as the prices of APIs have started skyrocketing during the last few months. The sharp rise in API prices is now sending shock waves through the Indian pharmaceutical industry as the country is heavily dependent on the APIs imported from China to produce the drug formulations. As per official data, currently India is importing about $3 billion worth of APIs, intermediates and other chemicals from China. This is more than 80 per cent of the country’s annual requirements of APIs. According to media reports, the prices of some APIs have gone up by as much as 45 per cent during the last four months in the Indian market. As per reports, the API price has already gone up substantially in many cases and if the situation continues, it will go up further. For instance, the price of Paracetamol I.P has risen by 45 per cent in the last few months, propylene glycol I.P is up by 30 per cent, azithromycin by 36 per cent, ciprofloxacin by 28 per cent and ofloxacin by 31 per cent. Other APIs whose prices have shown an upward trend include Rabeorazole, Esomeprazole Magnesium, Pantoprazole Sodium, Methylcobalamine, Losartan Potassium, Sildnafil Citrate, Montelukast, Telmisartan, Cefixime, Cefpodoxime Proxetil and Cefuroxime Axetil. The Indian drug manufacturers, especially small and medium enterprises, are bearing the maximum brunt of the present API price surge as they are struggling to fulfill their contractual obligations owing to steep rise in production cost.
It is not that the situation has come all of a sudden. In fact, China is in the fifth year of its war on pollution. It is now focused on tighter regulations and stricter enforcement after learning the fact that the present environmental damage is hardly sustainable. That China is serious in its war on pollution is clear from the fact that hundreds of officials have been jailed for failing to check environmental violations uncovered during inspections last year. A total of 4305 officials in 10 provinces and regions had been brought to book for failing to rectify violations, with many of them facing heavy fines and prison term. This paints a further bleaker picture for the future. While all this has been happening in China, the Indian government failed to adopt preemptive measures and frame conducive policies to enhance domestic production of APIs in the country. Despite repeated pleas from the industry for several years to remove the serious anomalies in the regulatory framework that destroy the indigenous manufacturing of APIs, the Indian government did not show any urgency to act. Now, a more dangerous scenario awaits for the country, given the high volatile, geopolitical relationship existing between India and China. If any issue reaches a flashpoint and as a retaliatory measure China decides to stop export of APIs to India, the result would be disastrous for the country as the industry does not have any alternate sources to procure these basic raw materials. This may result in severe shortage of essential and life saving drugs in the country. To avoid such a gloomy situation, it is high time the government wakes up from its self-imposed slumber.