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India to witness price hike for APIs, no shortage with Covid situation in China: Pharmexcil

Shardul Nautiyal, Mumbai
Tuesday, January 3, 2023, 08:00 Hrs  [IST]

India may witness price hike for active pharmaceutical ingredients (APIs) and Key Starting Materials (KSMs) but no shortages in the wake of Covid-19 situation in China due to disruptions in demand and supply.
 
The uptick of Covid-19 in China has triggered fresh concerns among Indian exporters.

Exports of pharma products to China is USD 233 million between the period of April and November 2022 with a growth rate of 1.25% as against USD 230 million during the same period of the previous year. Export of APIs to China was USD 173.4 million with 5.11% growth as against USD 164.9 million of the previous year.

Imports of pharma products to China was USD 2,308 million with a negative growth of -1.23% as against USD 2,337 million of the previous year.

Imports of APIs is USD 2,089 million with 0.65% growth as against USD 2,075 million of the previous year.

“We don't foresee any shortage of APIs/KSMs with the Covid situation in China. However, there might be price hike for APIs as the pricing is subject to the demand-supply scenario. With the production linked incentive (PLI) schemes implemented, we are positive that import dependency will be reduced and the domestic industry capabilities will be strengthened especially in the area of fermentation,” according to Lakshmi Prasanna, director, regulatory affairs, Pharmexcil.

India is now all set to enhance its business prospects related to Free Trade Agreements (FTAs) with Australia, US, UK, Japan, UAE and EU.

India’s pharma sector would be the biggest gainer from the FTA between India and Australia as medicines will get fast approval under the agreement. This will also help to reduce Australia’s dependence on APIs from other countries.

A business delegation is likely to meet government officials, drug procurement agencies, local regulatory agency of Australia - Therapeutic Goods Regulator (TGA), local business stakeholders and trade community in the month of February, 2023. In 2019, a delegation was also led by Pharmexcil but the discussions could not continue due to Covid-19 pandemic in 2020.

FTA with Australia is significant as the country is very keen on the diversification of the sourcing of the APIs from the Indian pharma industry as there is no active API industry in Australia.

Australia’s pharma market is of USD 14.6 billion size in 2021 and is largely a patent driven market with a share of 70%. Generics has a little share of 12% and is valued at USD 1.7 billion. India has exported medicines to Australia worth USD 387 million in FY-2021-22 with a growth rate of 11.6%.

 
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