The recent tension between India and China has prompted the government here to think of measures to reduce its dependence on China for pharmaceutical products.
The health ministry along with drug regulators is planning to take a series of measures to limit reliance on China as well as tighten the regulatory checks and balances to ensure only good quality supplies are entering the Indian market.
Currently, India gets 70-80% of its medicines and medical devices supplies, including raw material for pharmaceuticals (Active Pharmaceutical Ingredient) from China. This poses a major risk of severe drug shortage if India’s diplomatic relations with China worsen.
In fact, in 2014, National Security Adviser Ajit Doval + had also warned the government about India’s over-dependence on China for API and how tension between the two countries can cause a crisis in the public health system of India.
Following Doval’s alert, the government had formed a committee of experts to formulate a specific policy to boost API manufacturing in India.
The list of regulatory and financial measures being planned by the government includes routine inspections of plants, higher registration charges, hike in licensing fee, tougher sourcing procedures, higher customs duty and deeper scrutiny of supply chain.
“We do not want the trade to cease between the two countries. The idea is to regulate small foreign players who may not be supplying quality products but giving pricing advantage. This in turn is hurting the interest of Indian patients as well as the industry. We want to create a level playing field for Indian companies and also ensure good quality products for Indian patients,” Drugs Controller General of India (DCGI) G N Singh said.
The regulator is planning to start site inspections from next month itself, he said. The government is also planning to make changes to the Drugs and Cosmetics Rulessoon to hike registration charges and licensing fees.
Industry executives say Indian companies are subjected to much higher fees when they sell their products in China or in other countries but apart from imposing tougher norms on Chinese companies, the government must also take steps to boost the growth of Indian industry.
“The measures are important to bring a parity to fee structures but it has its consequences like impact on prices and competition,” says D G Shah, secretary general of Indian Pharmaceutical Alliance.
The landed price of API from China in India is 15-20% less than its production cost here, making it more viable for companies to import.
“Once the government strengthens the regulatory mechanism and imposes higher fee structures, a lot of fly by night operators will stop operating in this space. While Indian players will benefit from this, it will also ensure patient safety,” said Himanshu Baid, managing director of Ploy Medicure and chairman of CII Medical Technology Division.
Currently, API accounts for less than 10% of India’s over Rs 1 lakh crore pharmaceutical industry. However, India was once a favoured destination for sourcing low-cost, good quality raw material for manufacturing medicines. Gradually, China has taken over this bulk drug market globally in the past few years by creating huge capacities.