China Strikes Formulators!!! ...
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China Strikes Formulators!!! – Courtesy pharmabiz
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Indian formulation industry has been almost totally dependent on Chinese suppliers for their API requirements for several years as they have been offering these products at very low prices. And most of the formulation companies have been sourcing the Chinese bulk drugs although quality of a good number of these products was not of standard. Many of the antibiotics, cholesterol drugs, cardiovascular drugs, TB drugs, analgesics, etc. thus used to be dumped in the Indian market at the manufacturing cost or even below the cost. Indian API producers have not been able to offer APIs at the rates China was selling to the Indian formulators. Continued dependence on China for bulk drugs has thus gradually forced many of the Indian API units to either cut down the production or totally stop the manufacture over the years. Many industry experts cautioned Indian formulators and the government that a situation like this could ultimately end up in dictating of prices of APIs by the Chinese suppliers in the long run. And that is what has started happening now. Chinese suppliers have jacked up prices of folic acid and paracetamol a couple of weeks ago with no worthwhile reason. The folic acid price got pushed up by 1333 per cent and that of paracetamol by 32.5 per cent. Both these drugs are being regularly imported from China and the demand for these drugs has been steadily rising.

Probably this is only the beginning of a series of price hikes planned by the Chinese companies for widely used APIs in India and other formulation producing countries. Hefty price hikes by Chinese suppliers leave not much option especially to the medium and small scale formulators. The key advantage China has is its huge scale of operations and they supply even to the US and European markets too. Many of these APIs are not produced by the European and American companies and even if they do, prices will not be affordable to Indian companies. The emerging scenario for the Indian pharmaceutical industry is indeed disturbing as the net result of this trend will be sharp price hikes of most of the essential and life saving medicines. The government of India knew that India’s excessive dependence on China for its APIs could lead to a crisis but no effective steps were taken to counter this problem. The new government at the centre, is stated to be taking some steps to encourage bulk drug manufacture in the country. The government is examining the recommendations of an inter-ministerial committee report submitted recently to boost manufacturing APIs by setting up of pharma clusters in the country. It is also planning to come out with some specific incentives to motivate potential bulk drug producers. There has to be some amount of urgency for execution of this plans and programmes as the country is under the threat of sharp price hikes of most of the APIs.

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