India may face shortage of drugs as supplies from Chinese companies dry up

Almost 60% of India's total bulk drug requirements are imported from China

Apart from Vitamin C, there is currently no shortage of medicines in chemist shops, but this situation could change soon. Industry insiders say antibiotics, steroids, and other drugs are becoming hard to find because sourcing bulk drugs from China continues to remain a challenge.

Almost 60 per cent of India’s bulk drugs are imported from China. Supplies have been disrupted owing to Chinese companies upgrading their plants or shutting down over environmental concerns.

The data shows a dip in volumes for formulations for which bulk drugs or chemical compounds used in producing active pharmaceutical ingredients (APIs) are not available in India. Industry sources say that since the situation is unlikely to ease, there could soon be a shortage of medicines. “The pipeline stock is getting liquidated and soon there will be production cuts at various manufacturing units,” said a source.

Deepnath Roy Chowdhury, national president of the Indian Drug Manufacturers’ Association (IDMA), is so concerned that he has conveyed to the government that it was now a question of ‘national health security’. 

The IDMA has asked the Centre to consider allowing bulk drugmakers the flexibility to change their product mix — as long as the effluent load does not increase. This, says Roy Chowdhury, would help to ease the dwindling supplies of APIs.

Bulk drugs or APIs are the raw materials used for making formulations or medicines. Intermediates are the chemical compounds used for APIs. Certain APIs are not manufactured in India and some of the intermediate products, too, are not available here. These include the APIs for ascorbic acid (used to make Vitamin C), Aspartame (used to make artificial sweeteners), Rifampicin (antibiotic), Doxycycline (antibiotic), Tazobactam acid (antibiotic), vitamins, and steroids. The intermediates, which are not available in India, are used for products such as Atorvastatin (anti-cholesterol drug), Ciprofloxacin (antibiotic), Chloroquine (anti-malarial), Gabapentin (anxiety drug), Montelukast (for seasonal allergies), Telmisartan (hypertension), Cephalosporins (antibiotics), and Olmesartan (hypertension).

Data from market research firm AIOCD Awacs shows that growth in these molecules has been affected. For example, the moving annual turnover (MAT) value growth for Atorvastatin in August 2018 was only 0.1 per cent, while the MAT unit growth (or volumes) slipped by 2.3 per cent in August. Similarly, for Montelukast, there was a volume dip of 22.5 per cent as per the MAT for August. For Chloroquine, the volume dip was 10.4 per cent in the August MAT. Sanjeev Jain, director, Akums Drugs & Pharmaceuticals, a leading contract manufacturer producing drugs for the major drug companies, said he was ‘alarmed’. Akums accounts for nearly 12 per cent of India’s overall pharmaceutical production. “Sourcing of APIs for pharmaceutical production is a challenge and if this continues, there would be a shortage of medicines available in the market,” said Jain.

Sources point out that, as the sourcing of APIs has become a challenge, the credit cycle has also taken a hit. “Earlier, we were buying APIs on 90- to 120-day credit. Now, we are paying upfront for buying. Even then, there is a shortage of APIs,” said an industry source.

The shortage has not only led to the prices of bulk drugs rising by 20-90 per cent in the past few months, but also prompted companies to cut production. “This is especially the case for medicines that are under price control. For example, with Paracetamol, the API prices have doubled in the past six months. The finished drug is under price control, so manufacturers are not left with much option but to cut production. The same goes for Vitamin C products,” said a pharmaceutical manufacturer. 

“The industry is going through a process of adjustments — a switchover from imported to indigenous,” said D G Shah, secretary-general of the Indian Pharmaceutical Alliance that represents leading domestic drug firms. “The domestic manufacturers of API need time to re-commission the plants, besides obtaining environmental clearance. Hence, in the interim, until indigenous APIs replace the imported items, there will be shortages of some formulations.”

The government is taking steps to reduce the dependence on China for APIs. It is set to sign a memorandum of understanding with Uzbekistan to explore production possibilities.

Grim Progbosis

As supplies from China fall short, the industry warns of drugs used by millions becoming scarce

• Chinese supplies are likely to remain inadequate 
• The pipeline stock for APIs is decreasing 
• Industry seeks flexibility to alter product mix of APIs as long as the effluent load does not increase
• Statins, antibiotics, steroids, and drugs for anxiety and hypertension could be affected

Some key APIs not manufactured in India

• Ascorbic Acid, Aspartame, Rifampicin, Clavulanate Potassium, Doxycycline, Steroids, Tazobactam Acid, Vitamins 

Some key intermediates not available in India

• Atorvastatin, Ciprofloxacin, Chloroquine, Gabapentin, Montelukast, Olmesartan, Telmisartan, Cephalosporins