Himachal pharma firms battle higher input costs

Tribune News Service

Ambika Sharma

Solan, April 29

A steep increase in the price of raw material coupled with the rising logistics and packaging cost has unnerved the pharmaceutical industry in Himachal, especially micro, small and medium enterprises (MSME), which are the major sufferers.

Availability of APIs affected

• Following Covid-induced shutdown in China, the availability of APIs has been affected and its price has increased considerably.
• Rise in the price of packaging material has burdened the industry.
• Increase in the price of diesel has added to the woes of the industry

The Covid lockdown in China has further hit the industry, as the availability of active pharmaceutical ingredients (APIs) has been affected and its price has increased considerably. The domestic pharmaceutical industry imports around 67 per cent of APIs from China.

The price of the key APIs like cefixime has increased from Rs 11,000 per kg to Rs 13,000 per kg while that of cefpodoxime proxetil has gone up from Rs 10,200 to Rs 14,100 per kg.

The price of paracetamol, which is a key API used in a number of formulations, continues to increase and is available at Rs 650 per kg now against Rs 350 per kg about three months ago. The price of ofloxacin has also increased from Rs 2,800 to Rs 3,100 per kg, say sources in the Baddi pharmaceutical industry.

The National Pharmaceutical Pricing Authority has increased by 10.7 per cent the prices of more than 800 essential drugs falling under the National List of Essential Medicines, as per the Wholesale Price Index, from April 1, but this will not offset the exponential rise in the prices, say the sources.

The rise in the prices of packaging material has further burdened the industry. “The packaging cost has risen by nearly 35 per cent in the past 70 to 80 days due to the rise in the prices of input materials such as kraft paper, white box, stitching wire, starch, ink as well as fuel cost,” says Rajiv Gulati, vice-president, HP Corrugation Box Manufacturers Association. He adds that the MSME industry is bearing the brunt due to low margins.

The increase in the price of diesel has added to the woes of the industry. “As against Rs 3 lakh incurred on a container earlier, the cost has now gone up to Rs 10 lakh and one had to wait for nearly three to four weeks to arrange a container,” says SL Singla, Adviser, Himachal Pradesh Drug Manufacturers Association.

With shrinking margins and low availability of inputs, smaller players are finding it difficult, says Singla.

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