Over­com­ing de­pen­dency on China...

BioSpectrum (India) - - BIO EDIT - Milind Kokje Chief Ed­i­tor milind.kokje@mmac­tiv.com

Con­flict with China at Dok­lam is bound to have rip­ples in dif­fer­ent ar­eas, po­lit­i­cal and eco­nomic. Pharma sec­tor is also one of them go­ing by the im­ports from China for mak­ing drugs. Thus, it is very per­ti­nent that the Drug Con­troller Gen­eral of In­dia (DCGI) has asked In­dian drug mak­ers to pre­pare plans in the even­tu­al­ity of es­ca­la­tion in the bor­der ten­sion lead­ing to stop­page of ex­ports from China.

Such a plan is very much es­sen­tial as In­dia’s drug in­dus­try de­pends heav­ily on large scale im­ports of ac­tive phar­ma­ceu­ti­cal in­gre­di­ents (APIs). As per the in­for­ma­tion given to the Par­lia­ment, about 84% of APIs of all drugs pro­duced in In­dia are im­ported. Of that 65% is from China alone. In ac­tual mon­e­tary terms, it comes to ap­prox­i­mately Rs 13,853 crore in the pre­vi­ous year. There is a con­stant hike in the API im­ports from China. In 2013-14 it was Rs 12061 crore and in 2014-15 Rs 12758 crore.

A marginally good de­vel­op­ment is that the im­ports of bulk drugs from China have re­duced from Rs 13,853 crore in 2015-16 to Rs 9,120 crores in 2016-17. This is due to with­drawal of ex­emp­tions in cus­toms duty in some cat­e­gories to pro­vide level playing field to do­mes­tic man­u­fac­tur­ers. De­spite the re­duc­tion 60% of bulk drugs are still be­ing im­ported from China, which is still a huge fig­ure and needs to be brought down dras­ti­cally fur­ther.

The main rea­son for the im­ports of APIs from China is the low price ad­van­tage. But, de­pen­dence only one coun­try for such a large im­port for APIs as well as some bulk drugs is po­ten­tially a very risky sit­u­a­tion if the im­ports from China sud­denly stop due to es­ca­lat­ing ten­sion be­tween the two coun­tries. Even the Na­tional Se­cu­rity Ad­vi­sor had warned the gov­ern­ment last year about over-de­pen­dence on China for the sup­ply of APIs and some es­sen­tial drugs.

It is a good step that along with the DCGI, the in­dus­try as­so­ci­a­tion has also taken ini­tia­tive in sug­gest­ing ways to re­duce de­pen­dence on China for APIs im­ports. It ap­pears that In­dian Drug Man­u­fac­tur­ers’ As­so­ci­a­tion (IDMA) and other in­dus­try or­gan­i­sa­tions have sug­gested mea­sures like gov­ern­ment en­ter­ing into agreements with friendly coun­tries, more fees on im­ports, re­vival of public sec­tor units pro­duc­ing raw ma­te­ri­als, ex­plor­ing al­ter­na­tive sources and in­creas­ing inspections of APIs pro­duc­ing fa­cil­i­ties in China. Of the sug­gested steps, the gov­ern­ment has al­ready an­nounced its in­ten­tion in May 2017 to start in­spect­ing drug man­u­fac­tur­ing fa­cil­i­ties in China to en­sure that only qual­ity APIs are im­ported. The gov­ern­ment was even se­ri­ously think­ing of set­ting up per­ma­nent au­dit of­fice in China to con­duct inspections reg­u­larly.

Re­gard­ing other mea­sures to re­duce over de­pen­dence, the gov­ern­ment had an­nounced as back as in 2015 to pro­mote Make in In­dia ini­tia­tive for APIs and bulk drugs. The Prime Min­is­ter’s Of­fice (PMO) last year in­structed the NITI Aayog and the con­cerned min­istries to plan for APIs pro­duc­tion in In­dia. But de­spite or­gan­is­ing some meet­ings and hav­ing nearly

300 large and more than 10,000 medium & small com­pa­nies in the sec­tor there was not much progress in this di­rec­tion.

So, the ten­sion on the bor­der has once again re­vived the topic and some ac­tion has ini­ti­ated. How­ever, not only due to emer­gency sit­u­a­tion like bor­der ten­sion, but oth­er­wise also it is es­sen­tial to re­duce the over-de­pen­dence on any one coun­try. Hence the plan­ning and the sub­se­quent ac­tions should be speed up. Oth­er­wise once the ten­sion on the bor­der is dif­fused the topic may again go to the back seat. The in­dus­try also needs to keep build­ing the pres­sure as it needs sup­port from the gov­ern­ment to pro­mote do­mes­tic APIs pro­duc­tion for keep­ing the prices low.

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