HONG KONG - India has made amendments to the export policy of certain active pharmaceutical ingredients (APIs) and the formulations based on some specific APIs.
In a note dated March 3, India’s Directorate General of Foreign Trade compiled a list of now restricted APIs and formulations that were previously free to export. It ranged from paracetamol and erythromycin salts to progesterone and vitamin B1, 6 and 12.
Malini Aisola, co-convenor of All India Drug Action Network, told BioWorld that many pharmaceutical representatives have been held up in meetings with regard to this. “They’re all busy in government meetings. The government is holding day-long meetings in the last few days,” she said.
Despite the fears that the COVID-19 epidemic may be creating issues for India’s pharma industry, Aisola said she sees this as more of a precautionary measure.
P.D. Vaghela, the secretary of India’s Department of Pharmaceuticals, reminded everyone that this was not a ban.
“There is no ban. It is only a temporary restriction of a few APIs. They can export after getting permission of the Directorate General of Foreign Trade,” Vaghela told BioWorld.
Mahesh Doshi, national president of the Indian Drug Manufacturers’ Association, also doesn't see any reason to panic because of the latest developments.
“It is only a restriction, not a ban. If companies need to export, they just need to report it to the authorities and follow the formalities,” Doshi told BioWorld.
He said he doesn’t expect the restrictions to cause any concerns for Indian pharma, especially since he said Chinese factories are moving back to production mode again.
Yusuf Hamied, the chairman of Indian drug giant Cipla Ltd., said the country’s big pharmas are currently well-stocked.
“The large Indian pharmaceutical companies have stocks that will last them for the next six months. If there are challenges in replenishing the stocks, then there might be issues,” Hamied told BioWorld.
He asserted that his corporation hasn’t encountered any issues with obtaining supplies so far. A recently issued note by Fitch Solutions backs that up on the multinational corporation front.
“Multinational pharmaceutical companies are well-prepared. While most large companies usually keep an inventory for about two to three months due to fluctuating supply and prices of bulk drugs, if the crisis continues, they will have to consider other options, including buying from other countries at a higher price,” reads the note. It also points to Basel, Switzerland-based Roche Holding AG as an example, since it has one API for global demand coming from China with existing stock reserves and the opportunity to source from another location.
India’s export restrictions make up around 10% of India’s export capacity, according to Stephen Hahn, commissioner for the U.S. FDA. Though the agency is still investigating the impact of this latest development, it has raised concerns about the U.S.’ overdependence on sources from abroad.
China is home to around 13% of the 1,788 facilities that manufacture APIs for drugs marketed in the U.S.
India’s pharma industry is even more dependent on China – it imports around 84% of its APIs from the country, according to the Central Drugs Standard Control Organization. The imports are used to manufacture key medicines, such as paracetamol, metformin, ofloxacin, metronidazole, ampicillin and amoxycillin.
“Most of India’s API supply comes from China,” Hamied said. “If there were shortages from China, there might be an issue, but we have not come to that point yet,” although he conceded that the situation would be concerning if Chinese production output remained at a standstill for another six months.
The stall in China’s production due to the COVID-19 virus has also caused worries about its ripple effects on the global supply chain.
The outbreak has forced factories in China to delay re-opening along with travel restrictions imposed in some parts of the country. Orders that are supposed to be delivered in the second quarter of 2020 are expected to be mostly affected. But as China gains more control over the epidemic, factories in key sectors and in other provinces other than Hubei are starting to resume operations even though it will take them a while to go back to the same production level.
India is also considering ways to wean itself off the dependence on China. The Department of Pharmaceuticals is said to be working out an incentive scheme with government think tank Niti Aayog to encourage the domestic manufacturing of APIs.
A technical committee has also been set up to make recommendations for the manufacturing of APIs.