GOVERNANCE/ HEALTH ISSUE
Topic: General Studies 2:
- Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
Drug Security: COVID-19’ s impact on API Industry
Do you know?
- All drugs are made up of two core components: API & Excipients
- Indian pharmaceutical industry is the 3rd largest in the world by volume but is largely dependent on China
- India imports 80% of the APIs used for drug manufacturing from China
What is Active Pharmaceutical Ingredient (API)?
- Part of any drug that produces its effects.
- Intended to furnish pharmacological activity or other direct effect in the diagnosis, cure, mitigation, treatment, or prevention of disease
What are Excipients?
- Substances other than the drug that helps deliver the medication to your system.
- Excipients are chemically inactive substances, such as lactose or mineral oil.
- Example: for headache, acetaminophen is the API, while the liquid in the gel-capsule or the bulk of a pill is the excipient.
Why India is poor in APIs?
- Weak Domestic Manufacturing sector
- Inadequate government support
- Lack of Central-State cooperation in effective policy making
Impact on COVID-19 on India’s API sector
- Hostage to Supply Side disruption due to high dependence on China on APIs thus endangering the drug security in India
- Price Rise of pharmaceutical drugs
- Impacts the affordable healthcare services
- Disproportionately impacts the poor
Measures taken by the government (on 21st March 2020)
- Production Linked Incentive Scheme
- Objective: To encourage domestic manufacture of key starting materials (raw material used in manufacture of APIs), drug intermediates, and APIs.
- Financial incentive will be given to eligible manufacturers of identified 53 critical bulk drugs on their incremental sales over the base year (2019-20) for a period of 6 years.
- A sum of Rs. 6,940 crore has been approved for this scheme
- Promotion of Bulk Drug Parks
- 3 mega Bulk Drug parks will be developed in India in partnership with States.
- Parks will have common facilities such as solvent recovery plant, distillation plant, power & steam units, common effluent treatment plant etc.
- A sum of Rs. 3,000 crore has been approved for this scheme for next 5 years.
Impact of the above two initiatives:
- Reduces manufacturing cost of bulk drugs in the country
- Reduces dependency on other countries for bulk drugs
- Attracts private sector and foreign investment into the sector
- Creates additional employment
- Issues with Government’s price-capping policy – so less private player participation
- Drug makers are forced to cut costs to maximise profits – favour cheap Chinese APIs with basic minimum quality, Indian made APIs
- Also capping prices doesn’t really succeed (study from different countries)
- Drug price control Order (DPCO) needs reforms and amendments
Connecting the dots
- Medical Devices Amendment Rules
- How India can attain self-sufficiency in manufacturing drugs