Pharma sector requests time-bound relief in DPCO list citing APIs price rise
The prices of APIs used in hand sanitisers have also jumped significantly
A significant surge in the prices of active pharmaceutical ingredients (APIs) for drugs like azithromycin, hydroxychloroquine (HCQ), paracetamol, cefixime, Isopropyl Alcohol, Carbomer and Glycerine, along with the APIs used in hand sanitisers, has led the pharma industry to request the government to streamline the supply chain and provide temporary relief from price control of certain medicines. All these are used to fight against the coronavirus (COVID-19). However, industry experts also suspect that these APIs are being hoarded by distributors in the country. Particularly, in the case of azithromycin, which is prescribed to control/ prevent different kinds of viruses in the human body.
Disruption in the supply chain and lockdown in China during the month of January 2020, especially Wuhan city which exports a majority of APIs and key starting material (KSM), the prices of these APIs increased significantly in comparison to the same period of last year. The prices of these APIs went up further in the Indian market during the nationwide lockdown.
Check the table below to note the significant rise in the API prices in the Indian market from the month of January 2020 to the current month of April 2020.
Commenting on this situation, Vinay Pinto, Executive Director, Wallace Pharma said, “To ensure a steady pharma supply chain, all Central GOI ministries are doing a tremendous job of ensuring bureaucratic challenges are swept away. Most raw material prices are stable except for COVID-19 related materials. Compared with January 20 prices, paracetamol and hydroxychloroquine have spiked nearly 2x and 3-5x respectively. And the government should take note of this as both are price-controlled.”
He elaborated, “We continue to face intense transportation challenges at the local and district level and increased transport costs. In the coming weeks, last-mile logistical challenges could very well lead to shortages of medicines in some western and northern states. The government should pass on the savings in petroleum by reducing diesel prices to mitigate increased transportation costs.”
Viranchi Shah, National Vice President, IDMA-GSB commented, “There is constant import taking place from China for all these APIs. In this crisis situation, there is a need to watch the stocks of these APIs, imported as well as manufactured in the country, to understand their availability and prevent any hoarding activities. There is also a need to sensitise the supply chain for smooth functioning and availability of these raw materials.”
Shah also suggested, “To reduce import burden, the Government should allow the API industry to function at its full strength. And considering the fact that MSMEs do not buy APIs by the truckload, there should be some mechanism in the supply chain, like consolidation of essentials in one truck for the same route. It will be a relief to MSMEs.”
Harish Jain, Secretary, Karnataka Drugs and Pharmaceutical Manufacturers Association said, “India is heavily dependent on China for API, KSM and Intermediates supply for the manufacture of formulations both for domestic and export. Ever since COVID-19 crisis has erupted, starting with China and now in India, there has been severe supply disruptions. This has resulted in the prices of many APIs skyrocketing and there is a heavy shortage. Lifting of ban on export has further made the situation worse. Added to that, operations and financial statuses, especially of MSMEs, are heavily impacted. We are not only paying higher prices on inputs but are also forced to pay upfront to most suppliers instead of 30 to 60 days of credit norms earlier.”
Rahul Bansal, Director, BRD MediLabs said, “Due to various reasons, there is a shortage of some raw materials because of interrupted sale and movement from both inside and outside the country. But the difficulty of operations has led to an increase in the rates of APIs. Also, the operating costs of the units have gone up significantly because of sub-optimal production outputs. Whereas, because of the DPCO, the MRPs of drugs cannot be increased proportionately and therefore, for some of the products, it is difficult to maintain supplies. To avoid this state in the near future, the government should give some time-bound relief to the industry. It could take of these drugs from the DPCO list or offer some alternate solutions.”
S V Veeramani, Chairman and Managing Director, Fourrts Laboratories pointed out, “Raw materials prices have gone up by 20 to 30 per cent and we are also not getting them freely due to their production problems and transportation issues. Prices of some materials like Isopropyl alcohol (IPA) and other excipients have gone up by 100 per cent. Due to price controls, we also cannot increase the prices of finished formulations. We hope that NPPA will take note of the same and allow a proportionate price increase in genuine cases.”
Bhavin Mehta, Director, Kilitch Drugs said, “Within three months, paracetamol prices have skyrocketed without much increase in input costs, many exporters who have bid for tenders had to forgo their bids in order to curtail the losses, India has lost a great opportunity to capitalise the opportunities in these crucial times.”
Kuldeep Gupta Director, Vivek Pharmachem India informed, “For every API, which is the basic raw material for manufacturing of the medicines, our country is reliant on China and with China extending the new year holidays due to Coronavirus, there has been a severe shortage of raw material in the market. Due to non-availability of APIs and increase in demand, the rates have escalated by 150 per cent – 1000 per cent depending on the product as well as the demand and supply gaps. Besides, various additives, preservatives and expedients, which are required to prepare a dose form of any medicines are also not available in the market, and contributing to the increase in the prices of these raw materials.”
The WHO has recommended the use of hand sanitisers to prevent the spread of coronavirus. As a result, the prices of APIs used in these hand sanitisers have also jumped significantly. Isopropyl Alcohol, Carbomer and Glycerine have registered an increase in the price of per kg. They have risen from Rs 80 to Rs 250, from Rs 400 to Rs 3500 and from Rs 52 to Rs 95 respectively.
Addressing this issue, senior officials from the CDSCO cautioned, “To monitor the supply chain of all the medicines in the country, and prevent hoarding of these APIs, the CDSCO is constantly evaluating their market stock availability, and if anybody is found guilty, strict action will be taken against him/her.”
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