India-China standoff unlikely to hit output of pharma companies

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The Indian pharmaceutical industry has enough stock of raw materials, and the delays in clearing Chinese-origin shipments by customs across ports will not disrupt production.

Domestic drugmakers, which import about two-thirds of their active pharmaceutical ingredients (APIs) from China, witnessed severe supply disruptions since March due to the covid-19-led lockdown in Wuhan, and other pharma hubs.

Subsequently, Indian drug makers stocked up enough raw material to safeguard against any supply disruption from China, a top executive of a pharma major said, requesting anonymity. The existing stock with most pharma companies will last two to three months, while larger firms have at least four months of inventory for certain active pharmaceutical ingredient (APIs), he added.

“If they start clearing now and, it is done in the next one week, there will not be much impact,” said V.V. Krishna Reddy, president, Bulk Drugs Manufacturers’ Association.

Earlier this week, the customs department informed the industry that it will start clearing shipments of APIs imported from China after the government gave in to the pleas of the industry. Customs officials, across Indian ports, stopped clearing shipments originating from China since 22 June amid the border clashes between Chinese and Indian troops. “Apparently, there were rumours that the Chinese were trying to push some spurious material or narcotics along with the shipments, so the Indian authorities seemed to have become more vigilant,” said Daara B. Patel, secretary-general, Indian Drug Manufacturers’ Association.

Patel said if all shipments were not cleared from the ports to the manufacturers by next week, there could be a cascading effect and delays in production of medicine formulations. This could potentially affect drug supply in the coming weeks. However, he expected the situation to normalize by Monday.

Dinesh Dua, chairman of Pharmaceutical Export Promotion Council of India, earlier this week said that the total value of shipments is around 200 crore, and that about two-thirds are stuck at seaports and dry ports, where the disruption was severe.

Indian firms imported bulk drugs and intermediates worth $2.4 billion in 2018-19, a majority of it from China, besides the US, Italy, Singapore and Hong Kong. India depends most on China for fermentation-based APIs used in antibiotics, cardiovascular drugs, certain vitamins and paracetamol.

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