Curb imports of APIs to boost local production, says task force on pharma

NEW DELHI:In a move that could revive the country’s bulk drug industry, a government task force has recommended restrictions on the imports of active pharmaceutical ingredients ( APIs) and suggested incentives to boost domestic production instead.

Increasing indigenous production of APIs would ensure ready availability of drugs fighting the country’s rising disease burden, according to the pharmaceuticals department task force report on promoting manufacturing capabilities in the sector. “Scaling up manufacturing of medicines is not a hindrance for the robust domestic pharma industry players in India,” it said.

APIs, or bulk drugs, are the key ingredients used to give a drug its medicinal effect. While India once housed a robust bulk drugs industry, it is now at the mercy of countries like China to keep formulations going.

Major APIs, including those belonging to antibiotic class cephalosporin (used to treat various infections), aren't produced here. Even key intermediates used to make common antibiotics like amoxicillin that contribute to India’s exports aren’t locally manufactured. “The top 10 API players have a 5% market share, whereas the top 10 generic players hold 70%. With this level of asymmetry between API suppliers and generic formulations, is this situation sustainable,” asked Sanjay Chaturvedi, a senior pharma executive.
Steps like withdrawing concessional duties on API imports and levying anti-dumping duties on key intermediates used to make them could spur local production for APIs where manufacturers have adequate facilities to prevent shortages, said pharma representatives such as Indian Drug Manufacturers Association (IDMA) President SV Veeramani.

IDMA represents the interests of domestic drug makers.

Recommendations for incentives like cheaper power, faster environmental clearances and simplified land acquisition procedures cater to demands for sops to ease the situation for producers. Many feel such incentives would make it viable to domestically produce APIs and key intermediates, especially those required for drugs included in the National List of Essential Medicines.

“We would like to come back to a stage where we can make essential medicines at least," said Yogin Majmudar, former IDMA president.

According to IDMA’s Veeramani, pharma companies currently need about 45 clearances to set up a manufacturing plant. Processes need to be simplified and sped up as even getting five acres of land (the minimum space for an SME producing bulk drugs) is a tedious process, he said.

Recommendations to develop pharma clusters are also crucial to ensuring stable, low-cost production, said industry members. This approach, earlier rejected by the Prime Minister’s Office, was revisited for brownfield projects by producers like Bakul Group during a meeting with Minister for Chemicals and Fertilisers Ananth Kumar on January 20.

Official data show India imported APIs and key intermediates worth $3.2 billion in 2014-15.

While export body Pharmexcil says growth in imports has stabilised over the last two years, it still pegs almost 60% of the country's API and intermediate needs being met by China.

China's competitive prices, which could drop down to 50% of local bulk drug prices, is due to its government's backing—something that manufacturers here feel they sorely need.

“There were so many instances where local producers had to close down (due to dumping from China)—if not a unit, then the production of that particular item—and go into something less competitive,” said Majmudar.