Coronavirus outbreak in China hits Himachal pharma industry

Vijay C Roy/Ambika Sharma

Tribune News Service

Chandigarh/Solan, February 11

The shutdown in China due to coronavirus outbreak has turned disruptor for India’s pharmaceutical industry, as traders and importers dealing in bulk drugs or active pharmaceutical ingredients (APIs) have already increased prices sharply. According to manufacturers, in some cases prices of raw materials have nearly doubled.

According to industry, paracetamol which used to trade around Rs 250-300 per kg on an average in past six months is now trading at Rs 400-450 per kg. Similarly, montelukast sodium (anti-asthmatic drug) is trading between Rs 52,000 and Rs 58,000 per kg compared to Rs 33,000-38,000 per kg few months ago. The industry also complained that all vitamins were being traded at double or triple price.

APIs are key raw materials used to manufacture pharmaceutical formulations such as tablets, capsules and syrups. India is dependent on China for a large number of APIs and intermediates required to manufacture pharmaceutical formulations. According to estimates, India imports more than 65% APIs from China as they are cheaper and cost-effective. There were 67 APIs which were largely imported from Wuhan in China which chiefly included B12, B1, B6 and vitamin E ingredients.

“On an average, the industry keeps an inventory of 30-40 days. However, in between they also import or buy some intermediaries to manufacture final drugs. Considering the current price, it’s not a viable proposition. If the situation doesn’t normalise before March 31, then there might be a shortage of drugs,” said Himachal Drug Manufacturers Association president Dr Rajesh Gupta.

The API imports have been halted since mid-January ever since the coronavirus spread its tentacles in China and this has led to a spiralling increase in prices.

The manufacturers fear the markets will soon experience a shortage of essential medicines and life-saving drugs if the government fails to check the price rise of the APIs. “The API price has considerably increased the manufacturing cost of medicines enlisted in the National List of Essential Medicines whose ceiling price is already fixed by the government,” said SL Singla, adviser, Himachal Drug Manufacturers Association.

The situation would worsen in the weeks to come if the Union government doesn’t take effective steps to curb price rise or make available affordable APIs.

He said, “The Union government should step in and ensure that the API sellers don’t indulge in undue price hike to make the most of this volatile situation. If the situation doesn’t improve, the manufacturers will be forced to stop manufacturing of essential medicines and they could go off the shelf. The menace of price rise can be curbed by examining the customs duty paid by the API stockist as they are selling the old stock at higher cost in view of its shortage.”

With around 450 pharmaceutical units, the over Rs 40,000 crore-industry in Himachal Pradesh accounts for every third drug in the domestic market.

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