Drug output may fall if Covid-19 crisis drags on

Hyderabad: The coronavirus lockdown in China has brought the production of chemicals used in medicines, to a halt, negatively impacting the Indian pharmaceutical industry, the independent Investment Information and Credit Rating Agency (ICRA) has said.

On Thursday, ICRA released a statement that the ‘outlook on India has been revised from stable to negative’. Indian manufacturers have inventory for one to two months, and if the Covid19 crisis continues in China till mid-March 2020 there will be a disruption in supply that will make production in India difficult.

The Indian pharmaceutical industry, especially large companies, will have to source raw material from other countries at a higher price and this will increase the cost of production.

For small pharma manufacturers it will lead to a complete halt in production.

ICRA stated that profitability of the domestic pharmaceutical companies will take a hit and it will depend from company to company on the inventory that they presently have.

The Indian pharmaceutical industry imports 60 per cent of its active pharmaceutical ingredients (API) from China.

There is high dependency of 80 per cent for API like cephalosporins, azit-hromycin and penicillin. Cephalosporins is used in medicines for ear infections, sinus, urinary tract infection, gonorrhea, sepsis and meningitis.

India imports 70% of its raw chemicals
Azithromycin is used to treat bacterial infections, and penicillin is used for treating asthma, kidney disease, bleeding or blood-clotting disorder and diarrhea.

The active pharmaceutical ingredient is the main chemical component of a drug. The other component used in the making of drugs is the intermediate which is the raw chemical.

Intermediates account for 65 to 70 per cent of imports from China. These key raw materials like PenG and 7ACA are imported from China not just in India but the world over as they are the exclusive suppliers. These two are used in medicines for lifestyle ailments.