Himachal’s pharma industry rattled by sudden spike in raw material prices

The pharmaceutical industry in Himachal Pradesh has been rattled by a sudden and steep increase in the prices of key raw materials, with manufacturers alleging that traders are exploiting the ongoing Middle East crisis as a pretext to inflate rates. Industry stakeholders claim that most of these components are imported from China and therefore the geopolitical situation has little direct impact on their supply.Investors and manufacturers say traders have sharply increased the prices of Key Starting Materials (KSMs) and Active Pharmaceutical Ingredients (APIs), while also allegedly hoarding supplies. In certain cases, prices have surged by nearly 49 per cent within a single day, raising serious concerns among pharmaceutical units operating in the state.KSMs are basic raw materials and intermediates used in the manufacturing process, while APIs are the final components responsible for the therapeutic effect of medicines.Seeking immediate intervention, the Himachal Drug Manufacturers Association (HDMA) has urged the Union Government to closely monitor the situation and take strict action against traders accused of hoarding and artificially inflating prices.According to HDMA general secretary Manish Thakur, the absence of regulatory oversight has allowed suppliers to repeatedly revise prices within hours. “Traders are increasing the price in the morning and revising it again by evening. On March 7, an artificial scarcity was created when suppliers claimed that their stocks were exhausted. When the material became available on Monday, we were asked to pay exorbitant prices,” he said.Thakur cited the example of paracetamol, one of the most widely used analgesics. The price of the raw material rose sharply from Rs 255 per kg to Rs 310 in the morning and further to Rs 380 by evening, marking an increase of Rs 125 per kg in a single day.Manufacturers point out that the prices of medicines are regulated by central agencies such as the National Pharmaceutical Pricing Authority and are also linked to indices like the Wholesale Price Index. As a result, pharmaceutical companies cannot easily pass on the increased input costs to consumers. In many cases, cancelling purchase orders has become the only viable option.Industry players fear that if the situation continues, it could severely impact micro, small and medium enterprises (MSMEs) that operate on extremely thin profit margins.Manufacturers also allege that suppliers are imposing strict conditions and even cancelling confirmed purchase orders if consignments are not lifted immediately. In one such case, a supplier reportedly cancelled a confirmed order placed by a Baddi-based firm because the consignment could not be transported for two days due to vehicle unavailability. The company was then asked to place a fresh order at revised prices.The problem extends beyond pharmaceutical ingredients to petroleum-based inputs as well. Methanol, widely used in the production of various APIs, reportedly witnessed a sudden increase of Rs 45 per litre following fluctuations in international crude oil prices. However, manufacturers say the rates have not been reduced even after global prices stabilised.A manufacturer based in Nalagarh said his unit uses nearly 200 methanol tankers every month and the price surge has increased production costs by Rs 80 to Rs 100 per unit of the final product.Industry leaders have urged the Centre to intervene quickly to prevent what they describe as artificial price manipulation that could disrupt pharmaceutical production.

Himachal’s pharma industry rattled by sudden spike in raw material prices

Drug manufacturers allege hoarding, artificial scarcity of key inputs; seek urgent intervention from Centre to regulate soaring costs

Ambika Sharma

Tribune News Service

Himachal’s pharma industry rattled by sudden spike in raw material prices

Drug manufacturers allege hoarding, artificial scarcity of key inputs; seek urgent intervention from Centre to regulate soaring costs

Ambika Sharma

Tribune News Service

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