HP pharma cluster to cash in on falling Chinese imports

Vijay C Roy

Tribune News Service

Chandigarh, July 3

Drug-makers in Baddi, Barotiwala and Nalagarh industrial belt of Himachal Pradesh — the second largest pharmaceutical cluster of India — find an opportunity in setting up an industrial park for manufacturing of raw materials for formulations after imports from China dwindled.

Currently, Indian pharma companies import around 80% of their active pharmaceutical ingredients (APIs) requirement from China. So far, Indian manufacturers were unable to compete with their Chinese counterparts in economy and scale. The closure of several units in China has provided them an opportunity.

Himachal-based manufacturers have approached the Central government to expedite the proposed API Park in Baddi, which was announced in 2016.

The Chinese government has taken strict actions against over 100 APIs manufacturing plants in the past 5-6 months over pollution concerns, industry sources said. The sudden shortfall in availability of the raw material has led to a massive price increase. In some cases, prices have gone up by two-fold. For example, APIs for Paracetamol that used to sell around Rs 170 per kg six months ago is now being sold at Rs 360-375 per kg, a Baddi-based pharmaceutical manufacturer said. 

“The Centre had announced to set up four bulk drug API parks in Baddi, Visakhapatnam, Ahmedabad and Tamil Nadu two years ago, but the progress is very slow,” Himachal Drug Manufacturers Association president Dr Rajesh Gupta said. He said the state government has now acquired 600 bighas of land for the park, but approvals from various ministries are pending.

The manufacturers stressed that a dedicated team with stakeholders have to work on war footing for setting up cluster and to reduce dependence. Gupta said, the manufacturers will meet Health Minister JP Nadda and Chemicals and Fertiliser Minister Anant Kumar soon.

Himachal Drug Manufacturers Association represents 650 out of 750 pharma companies in the state. The total turnover of the industry in Baddi-Barotiwala-Nalagarh belt is around Rs 40,000 crore and has a significant share in the Rs 1.10 lakh-crore domestic market. According to industry experts, every third medicine in India is manufactured by the cluster. The cluster accounts for 10% of the country’s Rs 10,000-crore medicine exports.

Concerned over a spike in bulk drugs due to disruption in China, the industry has demanded price control of APIs’ rates. “Due to high input cost, manufacturers have left with no option but to cut production by almost 20%,” Kanha Biogenetic MD Arun Rawat said. “Government must include APIs’ prices in the drugs price control under the National Pharmaceutical Pricing Authority (NPPA),” said Gupta. Currently, the NPPA regulates prices of important formulations. The industry also asked for setting up of an APIs’ import monitoring cell to control black-marketing and overcharging by importers.

750 pharma firms in the state

Rs 40,000 crore Turnover of Baddi-Barotiwala-Nalagarh belt

Sees major potential

• Currently, Indian pharmaceutical companies import around 80% of their active pharmaceutical ingredients (APIs) requirement from China
• APIs are raw materials and intermediaries that are required to make finished drugs such as anti-diabetic, cardiovascularand antibiotics