COVID-19 Pandemic has triggered the global economy massively, and India Pharma Industry is no exclusion. India is a major global partner in the pharma supply chain. Here is a detailed analysis of whether this crisis can be a prospect for Indian Pharma?
Global positioning of Indian Pharma sector
Indian Pharma Industry stands in third place globally with 60% generics manufacturer in the world. India caters to 90% of the world’s measles vaccine demand. Other vaccines, like against diphtheria, pertussis, and tetanus, are also provided to the World Health Organisation (WHO). India accounts for 250 pharma plants supplying generics globally and recognized by the US Food and Drug Administration (FDA) and the UK Medicine and Healthcare Products Regulatory Agency (MHRA).
India’s active pharmaceutical ingredient (API) industry forecasts to earn around $6 billion by the end of 2020. Even after such a secure positioning in World markets, what can be the probable cause of its decline?
Shooting Drug Rates
COVID- 19 has left no country unaffected from its consequence. Key ingredients like Vitamins and Penicillin are getting costly. They are available at almost thrice their actual cost. China is a significant source of API imports for India. Expensive raw materials resulted in increased prices of generics in India. Recent reports stated that Paracetamol is available at around Rs.450 kg while it’s the actual cost being Rs.200 kg. The government is forming strategies and programs to meet the shortage chucks and boost up the Pharma production in the country.
India- China linkage effect
China being the epicenter of Corona Pandemic, manufacturing disruptions has led to triggered shortages. Many API producing factories in China have shut down, leading to a scarcity of raw materials for finished drugs. India’s drug regulatory Authority has reported that extending lockdown in China has potential dangers. It means the India pharma industry can run out of 57 essential APIs for critical antibiotics, hormones, and steroids. It is evident from the facts that supply chain hindrance in this Pandemic can be a potential hazard to the Indian pharma sector.
Trade disruptions within and across- Lockdown effect!
Drug transport within the country is also an emerging challenge. The restricted movement of people and goods has led to inter-state scarcity. Transport prices going sky-high and inefficient permits to truck drivers have slowed down the distribution process. Despite several government exemptions to drug movement and boosted lab testing, a shortage of APIs is a great caution. Not just the physical transport, also new generics launch and filings have all come to a stand. Reduced cash flow has abducted the whole pharma cycle in the economy.
This Pandemic has challenged the Indian pharma sector to leaps and bounds. US trade for Indian drugs is possible only after testing them through the US FDA. International flyovers are at a halt, further making it impossible for Indian drug units to serve overseas markets. All drug testing, fling, production, and supply are at a standstill. Social distancing, factory closures, and insufficient APIs are constraining production deadlines.
India’s smart move amid COVID-19 Pandemic!
The Government of India has recently made a masterstroke by proposing a significant package of 13.76 billion India rupees ($181 million) to the pharmaceutical sector. It can shoot up in-house production of crucial drug intermediates, APIs, and medical equipment. India is the highest producer of Hydroxychloroquine, a primary drug to treat Coronavirus is aiming at its bulk production. It can be an opportunity to capture the world’s generic needs.
With a robust workforce, expert scientists, and global hold in the medical sector, India can flourish back in international markets soon. India was dependent on China for significant API requirements. With the ‘Make in India’ program, the Indian pharma industry is rigorously increasing API and KSM production to emerge as a new global leader. These steps and moves can help the Indian pharma industry to reach new avenues and generate future global prospects in the near future!