Sigh of relief for pharmaceutical industry: India’s pain eases as China resumes bulk drug supplies

Resumption of normal supplies has also calmed worries, at least for now, about the Sino-Indian border standoff affecting imports from China and disrupting India’s pharma industry.

New Delhi: Supplies of bulk drugs from China are back to normal, easing concerns of India’s pharmaceutical industry that has been facing a shortage and rising cost of the raw material since the start of the coronavirus outbreak.

Resumption of normal supplies has also calmed worries, at least for now, about the Sino-Indian border standoff affecting imports from China and disrupting India’s pharma industry.

India, the world’s third-largest drug producer by volume, imports 70% of the active pharmaceutical ingredients (APIs), used by its drug makers, from China. For some APIs, especially antibiotics, the dependence is more than 90%.


ETD-14-24072020

The prices of APIs are on a downtrend now, industry executives said. The cost of most bulk drugs in India has come down by 20% from the peak high during the May-June period, they said.

“The prices have come down to normal and the supply is in abundance,” Pharmaceutical Export Promotion Council chairman Dinesh Dua said.

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Bulk drug producers in China’s major industrial provinces like Guangdong, Jiangsu, Zhejiang, Shandong and Fujian had shut their facilities earlier this year after the coronavirus outbreak.

In India, API prices increased steeply in May and June as supplies dwindled. For instance, the price of paracetamol, an API used in many formulations, rose 27% from its pre-Covid levels. Antibiotics ciprofloxacin and penicillin G, became costlier by 20%.

With the pandemic in control now in China, production and supplies have returned to normal levels.

Industry experts said the short-term impact on India’s pharma sector is over now. “The price of paracetamol which had reached ₹425 per kg is now ₹350. Everything is smooth now,” Federation of Pharmaceutical Entrepreneurs chairman BR Sikri said.

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Mehul Shah, a pharma expert familiar with the Chinese industry, told ET that Chinese suppliers were ready to sign two-three months of contract, which might be a signal that there would be no disruption of supplies in the coming few months unless there was a change of policy by the Chinese government. Chinese suppliers are also extending credit lines to Indian customers, he said.

Indian firms including Lupin, Sun Pharmaceuticals, Glenmark, Mankind, Dr Reddy’s and Torrent are dependent on imports from China. According to data from Pharmexcil, India imported ₹17,400 crore worth of APIs from China in 2018-19.

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