The Indian pharmaceutical industry, as on April
2020, is the world’s third largest drug producer with respect to volume. Also,
the Indian market manufactures about 60 per cent of vaccines globally. India is
known for supplying affordable and low-cost generic drugs to millions of people
across the globe and has operation for more than 250 US Food and Drug
Administration (FDA) and UK Medicine and Healthcare products Regulatory Agency
(MHRA) approved plants.
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According to a recent report on the Indian
pharmaceutical industry, the source of APIs is an important part of the pharmaceutical
industry’s strategic plan to combat the COVID-19 pandemic. The majority of APIs
for generic drug manufacturing globally are sourced from India, which also accounts
for approximately 30 per cent of the generic APIs used in the United States.
However, Indian pharma manufacturers rely heavily
on the Chinese APIs for the production of their medicine formulations,
procuring around 70 per cent from China, the top global producer and exporter
of APIs by volume. With the outbreak of the SARS-CoV-2 coronavirus outbreak or COVID-19,
the dependency of the Indian pharma sector on China for its API procurement has
been exposed. Supply chain disruptions and product exportation restrictions
from India was caused due to manpower shortages in China’s manufacturing
plants. Supplies were additionally impacted by the disruption of logistic and
transportation systems, restricting access and movement of products to and from
ports.
Before 1991, the Indian pharmaceutical industry
only imported 0.3 per cent of its APIs from the Chinese manufacturers. However,
with globalisation and the rise in large-scale formulation manufacturing
prompted the increase in API procurement from China. This was due to the low
cost of production.
Since the pandemic highlighted the dependency of the
Indian pharmaceutical companies on Chinese APIs, it prompted the Indian
government to set up a taskforce to review the internal API sector. Some of the
recommendations of the task force included fostering the approvals of
pharmaceutical infrastructure developments, clearance from the environment
ministry and providing tax exemptions and subsidies for the development and
promotion of the pharmaceutical industry hubs which could benefit the market.
The present situation pointed out that the Indian
government should take important steps in order to remove the technical and
financial barriers that will spur the pharmaceutical industry to ramp up its API
production, reducing the dependency. The Indian government recently proposed an
incentive package of 13.76 billion Indian Rupees (approximately USD180 million)
for the promotion of domestic manufacturing of critical key starting materials,
drug intermediates, APIs and medical devices.
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Let us also have a glance at the list of
regulations existing in the Indian API market. The Drugs and Cosmetics Act of
1940, framed during the British India some 79-80 years ago, became the basis of
import, distribution, manufacture and sales of drugs in India and continues to
be so. The Drug and Cosmetics Rule of 1945 and the 1940 Act were later clubbed
to list down detailed manufacturing requirements and to check the production of
spurious and low-quality pharmaceutical ingredients. Other major regulations
include the Pharmacy Act 1948, The Drugs & Magic Remedies (Objectionable
Advertisements) Act, 1954, Indian Patent Act 1970, Trade Marks act 1999, Drugs
Price Control Order, 1995 (DPCO), Uniform Code for Pharmaceutical Marketing
Practices (UCPMP) and Research and Development Cess Act, 1986. These have,
directly or indirectly, impacted this sector until 2019.
Presently, in
India, drug regulations are segmented into two bodies- the Central Drug
Authorities and the State Drug Regulatory Authorities. The Central Drugs
Standard Control Organization (CDSCO) is the apex national drug regulatory authority
which carries out the responsibilities allotted to the Central Government in
accordance with the Drugs and Cosmetics Act. Whereas, the State DRA controls
the state level affairs. Besides CDSCO and State regulatory agencies, others
are The Drug Controller General of India (DCGI) and National Pharmaceuticals
Pricing Authority (NPPA – 1995).
While many claim
that the Active Pharmaceutical Ingredient (API) manufacturing industry is
expanding and growing, there are some concerns. Till 2019, over 60 per cent of
APIs are sourced from other countries. For some specific APIs, the dependence
is over 80-90 per cent, according to the Department of Pharmaceuticals. There
are serious raw material supply disruptions and pricing volatility in the
Indian market which creates confusion in the market.
Indian pharma
market is one of the fastest growing markets after the Chinese market. In terms
of demand in the market, India has a prominent place, but when it comes to
manufacturing of API and generics, India continues to struggle in terms of
getting approvals, maintaining international quality, GMP and more. Executing the policies have become an uphill
task.
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