Gujarat pharma units face API shortage as imports from China slow down

FE Bureau

Gujarat-based pharmaceutical units have a reason to worry over coronavirus threat in China as supply of important active pharmaceutical ingredients (APIs) has been affected from the neighbouring country. Pharmaceutical units in the state are already facing inflated prices as the industry is heavily dependent on imports from China. "Supply chain of APIs has become slower as some of the importers of APIs have started holding the stock of important raw materials for the manufacturing of drugs.

Hence, uncertainty is prevailing in the segment. We are hopeful that normalcy would return to China and the supply of APIs would become smooth. But in case the current situation would not improve, manufacturing process of pharmaceutical units would have negative impact," said Viranchi Shah, chairman, Indian Drug Manufacturers’ Association (IDMA), Gujarat chapter.

It is worth mentioning that turnover of Gujarat-based pharmaceutical units is around Rs 70,000 crore, which is almost 30-35% of India’s total production of pharmaceutical products. The state is also having lion’s share of 28% in exports of pharmaceutical products from the country. Over 800 pharmaceutical units have been given licences by the state food and drug authority in Gujarat.

Former chairman of IDMA Gujarat, Kamlesh Udani, said that if the situation wouldn’t improve, things would go from bad to worse. According to him, everyone is waiting for an announcement from the Chinese authority over the restoration of API supply.

"Our API supply has also affected to an extent due to coronavirus. Also prices of key APIs including Paracetamol, Azithromycin, Ceftriaxone, Ciprofloxacin, Ibuprofen, Norfloxacin, have shot up by 30% to 80% since the outbreak of coronavirus in China. India has a high dependence on China for some APIs and intermediates and imports 65-70% of its requirements from the country," said Mahendra Patel, managing director of Ahmedabad-based Lincoln Pharmaceuticals.

Patel further said that pharma companies do stock API inventories in anticipation of production slowdown in China due to lunar new year holiday and hence the impact is still manageable. "But if the situation in China does not improve, it could have a negative impact on raw material sourcing in making medicines for viral flue, cold, antibiotics, diabetes, cardiovascular drugs, among other life-saving drugs," he said.

Pharmaceutical bodies like IDMA and the government are monitoring the developments in the neighbouring country closely and could consider a restriction on the export of life-saving drugs, antibiotics and other medicines to ensure that the country does not face any medicine shortage, he added.