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    China hikes prices of key drug ingredients

    Synopsis

    While increased prices will put cost pressure on the domestic industry over the next few months, more importantly it has sparked speculation that this could be a potential ploy by China to scupper efforts of India’s drug industry to be self-reliant, or ‘Atmanirbhar’.

    Travel and Leisure Asia
    For certain life-saving antibiotics like cephalosporins, azithromycin and penicillin, the dependence on Chinese imports is as high as 90%.
    MUMBAI: China has increased prices of key starting materials (KSMs), which are used for making medicines, by 10-20%, leaving those of basic raw materials — or active pharmaceutical ingredients (APIs) — largely unchanged. Both KSMs and APIs are imported in India for making life-saving antibiotics, steroids and other medicines.

    While increased prices will put cost pressure on the domestic industry over the next few months, more importantly it has sparked speculation that this could be a potential ploy by China to scupper efforts of India’s drug industry to be self-reliant, or ‘Atmanirbhar’.

    Here’s how China’s action may impact India’s Atmanirbhar plans: Any increase in prices of imported KSMs will discourage indigenous API production in the country, making units unviable and APIs less competitive against Chinese products globally. At present, India is dependent on China for KSMs and APIs, with 70-80% of basic raw materials imported for making medicines.

    For certain life-saving antibiotics like cephalosporins, azithromycin and penicillin, the dependence on Chinese imports is as high as 90%.

    To boost indigenous manufacturing and self-reliance, the government announced an incentive scheme to manufacture 50-odd crucial APIs, where import dependence is high.

    Typically, a spike in prices of KSMs is cyclical, and is followed by those in APIs too. But this did not happen this year. This has raised eyebrows and triggered apprehension. Experts said, “Coupled with appreciation in the RMB (Chinese currency renminbi), the move defies economic logic.”

    Further, the RMB increased 4% against the dollar over the last 45 days. Chinese companies are believed to be operating through a cartel and manipulating KSM prices for steroids and antibiotics, a Mumbai-based executive who trades in bulk drugs told TOI. Indian Drug Manufacturers’ Association president Mahesh Doshi said, “Cost pressure will be there (on API manufacturers) due to the increase in prices of imported KSMs.”

    The government’s production-linked scheme proposes to provide financial incentives to promote domestic manufacturing, but involves large investments from companies, particularly for the much-needed fermentation-based products. “It is crucial to ensure that investment happens. If not, then it will be impacted,” said PwC India pharma leader Sujay Shetty.


    China hikes prices of key drug ingredients

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    39 Comments on this Story

    Gaurav26 days ago
    This will keep happening untill our education stays around "Rattafication" & not giving practical knowledge about how to start businesses, setting up manufacturing plants, proper internships in industries (irrespective of their scale, size). Yes, teaching all this to students in school in lower classes is tough, but the "seed" of thinking has to be laid down from small age only. They will have a direction, will think big and will make an effort to for it.
    Sharad M29 days ago
    Half baked solutions will lead to half baked results.
    Mahendra Shrikhande31 days ago
    The folks calling the writer names are stupid....the KSMs are the raw material for the APIs...what China is doing is making the finished products that’s the APIs more cheaper to import than to make domestically in India by importing KSMs...
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