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The API Game in Pharma – Can India Score Against China and Become Aatmanirbhar?

indigenous production of API

At the initial stages of the Corona outbreak, the world desperately needed drugs like Hydroxychloroquine. Paracetamol etc. India, being host to a strong pharma industry, provided the essential medicines to more than 120 countries, including a lot of small countries. This goodwill earned by India made the globe look towards India as a major force in fighting the pandemic. As the External Affairs Minister S Jaishankar pointed out, irrespective of whatever part of the world the vaccine for Corona may come, only India has the capacity to make it affordable to the world with its strong pharma industry base.

Nevertheless, A Major Concern…

While all these have been a great news for India, there has been a concern that refrained the otherwise unstoppable Indian pharmaceuticals to be cautious. Because, though India produces major drugs at scale, most of the Active Pharmaceutical Ingredients (APIs) comes from China. This made many experts to argue that, at the end of the day China seems to be deciding the fate of India’s Pharmaceuticals.

All Set for a Change

Technology Information Forecasting and Assessment Council (TIFAC), an autonomous organization under the Department of Science & Technology has submitted its report recommending the measures that needs to be taken for boosting the indigenous production of API.

Is API Challenge Winnable?

The leading figures of India’s pharma industry were of the opinion that India need not be depending on China for API if it adopts certain measures. They had pointed out towards the restrictions they are facing in involving research, regulatory constraints etc.,

Of Course, all these were not the making of this government. The neglect of the governments decade back pushed India to this disadvantageous stage. However, industry leaders believe that the position can be regained with policy interventions from the government.

Action-ready Government

This government listens to the industry concerns and raises up to the challenges. On the issue of API too, the TIFAC report has come out with specific recommendations to make India non dependent on API seems to be the major starting point of reform.

Highlighting the fact that India had been leading the API production two decades back before the position was taken by China, the report recommends production cost optimization, scaling up of operations matching to the global norm etc, which needs the establishment of bulk parks.

In those areas of API in which India does not have technology, it proposes early stage Research and Development support through pilot projects and cooperation between industry and academia.

The Problem in a Gist

The report points out, “The pharmaceutical industry in India is third largest in the world, in terms of volume, behind China and Italy, and fourteenth largest in terms of value. It has a strong network of 3,000 drug companies and about 10,500 manufacturing units with a domestic turnover of ₹1.4 lakh crore (USD 20.03 billion) in 2019, with exports to more than 200 countries in the world. Despite a very strong base, due to low-profit margins and non-lucrative industry, domestic pharmaceutical companies have gradually stopped manufacturing APIs and started importing APIs, which was a cheaper option with increased profit margins on drugs. With the availability of cheaper APIs from China, the pharmaceutical industry relies heavily on imports. The imports from China have been increasing steadily and now stand around 68%.”

The ground lost to China over the previous decade can’t be won overnight as the industry leaders say. But it is not impossible either. The present administration has taken the first step with this TIFAC report. It has meticulously pointed out the areas where India can quickly regain the ground and the other areas which require a long-term action. The Covid-19 situation and the trust of the world India gained at this moment, the commitment of the government and all the stakeholders can converge to turn this challenge into an opportunity are promising a positive outcome.