There is an urgent need to revive the Ancillary industry: IPA

The COVID-19 pandemic has resulted in the Indian pharmaceutical supply chain facing several challenges. While medicines have been deemed as an essential item, entities ancillary to pharma manufacturers (Active Pharmaceutical Ingredients/ Key Starting Materials/ Excipients/Packaging material) have faced adversities during the lockdown. It is noticeable that the size of the ancillary industry is approximately $9 billion and is a key contributor to the success of pharma industry. Furthermore, Medium Small ME (MSMEs) have a significant salience of 55-60 per cent within ancillaries, contributed by 10,000 – 11,000 units.

Highlighting the importance of Ancillary partnerships, Satish Reddy, President, India Pharmaceutical Alliance (IPA) noted, “The Ancillary industry is a vital part of the pharmaceutical supply chain. For the industry to function, immediate action is required to support the ancillaries by identifying interventions that will enable their early revival in select segments and clusters.”

In this light, IPA in collaboration with Accenture has conducted a study that details out the best ways to revive the Pharma Ancillary Industry and a way forward. The study was backed by a detailed exercise which included more than 100 interviews with ancillary players across geographic clusters and segments, interviews with large pharma companies and a study of best practices adopted by Indian states and different countries. Basis the insights, the study entails a comprehensive set of recommendations for the pharma ancillary industry.

This report enunciates short-term and long-term recommendations for the revival of the industry. According to the findings:

• The short-term focus should be to providing disbursal of financial relief to MSME ancillaries and ensuring manpower attendance at work
• Robust disaster management framework backed by greater transparency across the ancillary network needs to be implemented
• Large pharma companies are providing necessary support to the MSMEs
• Long-term goals include self-reliance to manage the dependence of API/KSMs/Capital goods imports on a single geography along with active mentorship by the industry to guide ancillaries manufacture efficiently in the post-COVID “new normal” era

We believe that the cohesive efforts of pharma and ancillaries along with the government and the industry will be necessary to implement the recommendations. The report will help in expediting the action by bringing all industry stakeholders on the same page while also driving the policy agenda of the ancillary industry.

Sudarshan Jain, Secretary General, IPA said, “The Indian pharma landscape is evolving. With the revival of the API industry and the Ancillary Industry, we are well on our way to become a self-reliant Pharma sector. IPA will work collaboratively with all stakeholders to help implement the recommendations in the report to help industry.”