Last Updated on March 1, 2023 by The Health Master
Steep rise in active pharmaceuticals Ingredients (API)
The Indian pharmaceutical industry has been facing a steep increase of over 100% in the prices of certain raw materials for essential drugs, known as active pharmaceutical ingredients (APIs), from pre-pandemic levels.
The sharp hike is seen in high-volume key antibiotics like azithromycin and amoxicillin that are imported from China.
Interestingly, the prices of most vitamins, including vitamin B and D, also imported from China, are at an all-time low.
Reasons for the Increase:
The dramatic increase in prices is being attributed to multiple reasons such as inflation, increase in prices of key starting materials and solvents due to crude, and freight costs.
Moreover, the imports of certain products are being controlled by a few agents, leading to cartelization.
The Indian government should break the monopoly and prevent sole agents from controlling the market.
Dependency on China
India has near-complete dependence on China for the production of high-volume products like:
The cost has gone up for only those drugs for which raw materials are imported from China.
Since the pandemic spread, API prices of certain drugs like fever and pain relief medication, paracetamol, the life-saving antibiotic Meropenem (also used for Covid), and anti-diabetic metformin, jumped by over 200%.
API Prices Inflation:
API prices have remained inflated due to the lockdown in China for the past two-to-three years, logistics, and high energy prices.
The pandemic-induced supply disruption and logistics challenges have further impacted the prices. The government had allowed some price revisions a couple of years ago.
Pharma Policy and Price Control
According to the pharma policy, prices of essential drugs undergo a change – either increase or decrease – in line with the annual wholesale price index (WPI) in April each year.
Non-scheduled drugs (those outside price control) are allowed an annual increase of 10% every year.
Conclusion:
The sharp hike in the prices of APIs for essential drugs has raised concerns in the Indian pharma industry.
The industry is struggling with the dependency on China and the inflation of API prices due to various reasons.
The government needs to take necessary steps to break the monopoly and prevent sole agents from controlling the market to stabilize the prices of essential drugs.
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