DCGI Mulls Alternatives to China APIs
Asks pharma cos to chalk out emergency plans in case raw materials get blocked
Divya Rajagopal & Prabha Raghavan
Mumbai: The Drug Controller General of India (DCGI) has got local drug makers to draw up an emergency plan on dealing with any blockade on shipments from China of active pharmaceutical ingredients (APIs), or raw materials used to make medicines in the event of border tensions escalating. Indian companies get most of their APIs from China.
A meeting last month had discussed the matter, said a senior government official.
“The government has identified important therapeutic segments for which molecules are (mostly) imported (from China),” said the official. The meeting was attended by various industry association groups of both multinational and Indian drug makers. “The agenda of the meeting was to understand what measures the government could take to support the domestic industry and encourage it to manufacture these products.” The Indian Drug Manufacturers’ Association (IDMA), a lobby group of domestic pharma companies, recently submitted a six-page action plan that lists various measures that the Indian government should implement to reduce dependence on APIs from China. ET has seen a copy of this.
This includes higher registration fees on imports and increased inspections of APIs from China. It has also asked the government to explore alternative sources for raw materials, especially essential therapies such as anti-infective drugs. Additionally, it has suggested the revival of state-run units such as Hindustan Antibiotics that can produce essential raw materials in an emergency.
“At present, India is not able to manufacture many important drugs due to low-priced imports from China. In order to be ready for any future emergency, we need to have at least some capacities created for a few of the drugs which are identified as essential for the country. In this way, in case of any emergency, all that we need to do is increase capacity of the same in a short time,” IDMA said in the letter to the drug controller. “We should further ensure that companies are advised to maintain three-six months stock of APIs/intermediates that are imported from China.” There was no response to emails sent to DGCI on Monday. IDMA didn’t respond to queries.
India imports about 84% of the APIs it needs, according to officials in the Central Drugs and Standards Control Organisation (CDSCO). It got APIs worth ₹ 13,853 crore from China in FY16, or 65.3% of the ₹ 21,217 crore total. This included ingredients for essential antibiotics. The value of Chinese API imports, according to DCGI, is ₹ 8,000-10,000 crore in the Indian formulations market, which is estimated at ₹ 1 lakh crore by the industry.
Industry groups have suggested that the government enter into agreements with friendly nations for the supply of key medicines and APIs in the categories specified above.
“There is a concern that if the tensions continue over the border issue, this will hit pharma sector and it is worrying because we do not
even have the API capacity to manufacture a paracetamol,” said an executive who was at the meeting mentioned above. “But because Indian companies do not have any support from the government to produce APIs we are losing out to China.”
Though India is a leader in finished generic drugs, China is a preferred source for APIs because of price. The renewed Make in India push for APIs stems from the trade deficit of about $53 billion with China. Also, India’s repeated requests for increased market access in sectors such as pharmaceuticals and software have so far yielded little result. Last week Chinese drug maker Fosun said it had extended the deadline for closing the $1-billion acquisition of Indian drug maker Gland Pharma as it is yet to receive the approval of India’s cabinet committee on economic affairs. There’s been speculation that the border dispute may be a factor in this.
“I feel that normal macro trade might continue. However, it is the nontraditional sectors, the new emerging areas — the new opportunities which would have improved the overall trade balance — and investments that might take a hit,” said Alka Acharya, director of Institute of Chinese Studies, New Delhi. “We are in fact looking at the beginnings of the unraveling of the confidence that business and commerce that would provide the badly needed ballast to this relationship.”
Parliament was informed last August that the National Security Advisor had warned the government about over-dependence on the neighbouring country in the supply of essential drugs and APIs. To encourage domestic production of bulk drugs, the government notified the withdrawal of customs duty exemptions for certain categories of drugs and bulk drugs on January 28 last year.
The Prime Minister’s Office had instructed the Niti Aayog along with the ministries of health, commerce and industry, and chemicals and fertilisers to draw up a comprehensive plan to produce APIs in India. DCGI was also told to set up a regulatory office in China to better monitor the quality of products entering India. The rest of India’s API imports come from European countries, particularly Italy.
IDMA has sought higher registration fees on imports and increased inspections of APIs from China