Low imports from China lead to 15% shortage in drugs

India sources 80% of its APIs from China

MUMBAI: The current financial crisis has sent stress levels soaring. Can illnesses be far behind? But don’t expect much relief from the medical store close-by. Medicines are somewhat scarce in the market.

J S Shinde, president of the All India Organization of Chemists & Druggists (AIOCD), the apex body of 5.5 lakh chemists in the country, said chemists and druggists across India are seeing a 10-15% shortfall in medicines, especially antibiotics. “The flow of medicines has slowed down,” he said.

The shortfall is in commonly-used drugs with active raw materials such as paracetamol (for fever and pain), cephalosporin (antibiotic), chloramphenicol (typhoid, cholera), betamethasone (anti-inflammatory for eczema), cefalexin (antibiotic for urinary and respiratory tract infections), methylprednisolone (bronchitis, arthritis), and prednisolone (asthma, rheumatoid arthritis).

Prasad Danave, honorary general secretary of Retail and Dispensing Chemists Association, said, “The shortage has led to chemists losing about 10% of their business.”

The main reason for this shortfall is the decreased import of active pharmaceutical ingredients (API) - the raw materials used for manufacturing drugs - from China. India imports as much as 80% of its APIs from China as they are 10-50% cheaper than India-made ones.

But China clamped down on its manufacturing units during the Beijing Olympics to address concerns over pollution. Due to this, the supply of APIs to India was hit and prices shot up by 50-100%, said industry experts. AIOCD’s Shinde said, “The scene during the Olympics was bad and though it’s been long over, imports have still not stabilised. In August we had predicted the shortage to be around 30% by October-November. But it is about 15% now.”

Tapan Ray, the director general of pharma body Organization of Pharmaceutical Producers of India (OPPI), said that the price of paracetamol is more than 100% higher than the December 2007 levels. Ranjit Shahani, vice chairman and managing director of Novartis India, said antibiotics such as azithromycin and clarithromycin are still up by 30-50% over the 2007 prices. “The depreciation of rupee against the dollar has also played a role in the API issue,” he said.

According to Daara Patel, secretary-in-chief, Indian Drug Manufacturers Association (IDMA), the fall of rupee to Rs 49 against the dollar has upped the prices of raw materials by 25%.

Locally-produced APIs such as diclofenac (painkiller), carbamezapine (for epilepsy) etc, which depend on Chinese intermediates used for making drugs, are 15% above their 2007 price. According to Ranjit Kapadia, head (research), private client group at broking firm Prabhudas Lilladher, another factor that has caused API price rise is that the Chinese government has reduced export incentives to manufacturers by 7-13%.  The price of packaging material has gone up too, say experts.
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