The rising concerns over shortages of active pharmaceutical ingredients (APIs) and key raw materials for drugs like paracetamol due to
coronavirus outbreak in China, India’s pharma sector seems to have taken a hit due to supply chain delays.
Discussing the impact, Vijay Garg, joint MD of IOL Chemicals & Pharmaceuticals said that BASF (in US) shutdown and coronavirus is leading to ibuprofen shortage. "We are sitting on 6 months of ibuprofen inventory and have 6 month inventory of sodium metal raw material, which is from China," he said.
Chinese companies have increased prices of ibuprofen to USD 18/kg versus USD 15/kg. We expect ibuprofen prices to move up to USD 20/kg this year, said Garg.
On production front, Garg said, “We are operating at 800 metric tonne per month and out of that 50 percent goes in exports and 50 percent is domestic.”
As far as domestic market is concerned, we have not increased the prices, said Garg because most of the customers are on long-term basis. "We have yearly contracts with Cipla, Abbott, Sanofi. All the big names buy from us. Therefore, I don’t think we will increase prices in domestic market but export market is an opportunity, so definitely prices will go up there,” he added.
“Ibuprofen is not China dependent product; it’s an independent product. There is no impact as far as supply is concerned. India supply will continue but in countries like Latin America and Asian countries like Vietnam, Indonesia supplies were coming from Chinese companies and so we have started getting the enquiries from them as their demand is increasing and they want to build up inventories again,” added Garg.
According to Pankaj R Patel, CMD of Zydus Cadila Healthcare, the main price rise that is seen in the market is more a trader related price rise where traders who have imported and have some stocks are taking advantage of the situation.
One good thing is that the northern part of China, where the problem is not there and since some of the
APIs come from there, we are seeing shipments being sent now. "So, some shipments are coming from northern part but most of the APIs come from Wuhan and Hubei region and there the factories have not yet started. If things don’t improve there by April then we would start seeing some challenges with regards to supply,” Patel added.
In such a situation, said Patel, “There is no impact on consumers because all the pharmaceutical products are under price control and price increases cannot be done unless it’s approved by National Pharmaceutical Pricing Authority (NPPA). So, we don’t expect consumers to get impacted by this price but for people who buy on spot basis would have to buy at a higher price.”China is the only manufacturer of some APIs in the world, said Patel, adding that we need supportive government policies to ramp up production for APIs in the country.