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 tohigh 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
Challenges ahead
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
