Closed Chinese factories, soaring Dollar rate
Indian Pharma Cos experience double blow
Rajkot (Gujarat, India), Monday, July 16, 2018: Indian pharmaceutical industry is passing through turbulence phase created because of two external phenomenons – closure of Chinese factories and soaring dollar exchange rate with INR, said Anlon.
Mr. Punit Rasadia, Managing Director of Rajkot based pharmaceutical startup, Anlon, said that Indian pharma companies having dependency on importing raw material from China are facing biggest problem. Nearly 40 per cent of Chinese factories in 30 industrial provinces have been forced to shut down as part of government’s whip on polluting industries.
According to data released by the Ministry of Chemicals and Fertilizers, China accounted for 66 per cent of India’s total active pharmaceutical ingredients (APIs) imports in 2016-17 at Rs 12,254.97 crore. Bulk drug import from China stood at Rs 13,853 crore in 2015-16, accounting for 65.2 per cent of the total import.
Though the Government of India is considering a scheme for development of pharmaceutical industry under which one of the components is financing common facilities in bulk drug parks to reduce cost of production and dependency on China for APIs and intermediates but there is no news of the scheme yet, Mr. Rasadia lamented, “but it is a right opportunity for India to develop common facilities for APIs in India with cheap rate and ensuring good quality to reduce over dependency on import from China,” he added.
Apart from impact of closed pharmaceutical factories in China, he said, soaring Dollar price is also giving a big blow to Indian Pharmaceuticals industries. Currently Dollar to Indian Rupee exchange rate is hovering between Rs 67 to Rs 69 and very likely to touch Rs 70 mark very soon. “If Dollar-INR exchange rate touches Rs 70 or exceeds beyond psychological mark of Rs 70, invariably medicine prices will increase impacting general public who has to pay more for same medicine,” Mr. Rasadia informed adding if the rupee depreciation (against the dollar) persists, then there could be a long-term pain for the industry as well as consumers.
Commenting on the solution, Mr. Rasadia said, only long-term and robust planning is the only remedy to problems of this magnitude. He said, to face these challenges, Government of India should provide financial assistance to eligible SME pharma units having cGMP compliant manufacturing facilities both for bulk drugs and pharmaceutical formulations. Also, government should expedite the scheme to develop common facilities for APIs in India.