Covid lockdown in China begins to choke Himachal’s pharma hub
The indefinite lockdown in China’s commercial capital of Shanghai to contain the spread of Covid-19 has disrupted the supply of raw material to Himachal Pradesh’s pharmaceutical hub in the Baddi-Barotiwala and Nalagarh industrial belt, the biggest pharma hub in Asia leading to the doubling of cost of active pharmaceutical ingredients (API) and packaging material in the past month.
The prices of several medicines have doubled, such as Paracetamol, which was available for ₹300 a kg in March and now costs ₹700 a kg. There has been a 50% increase in the price of PVC (polyvinyl chloride used for packaging) from ₹110 to ₹190 a kg. The rate of aluminium, also used in packaging medicines, has increased from ₹300 to ₹625 a kg in a month. Cefixime trihydrate, the ingredient used for manufacturing of antibiotics, cost about ₹8,500 a kg in March, but its price has increased to ₹13,000 a kg now.
67 ingredients sourced from China
Himachal Pradesh is the country’s third-largest drug producer in terms of volume. It imports 65% of its requirement of raw material or intermediates from China. Raw material from China is used in making antibiotics, Paracetamol, drugs to treat diabetes and cardiovascular diseases. There are 67 such ingredients that are sourced from different locations in China. They include B12, B1, B6 and vitamin E and fermentation process-based APIs.
Both active and inactive ingredients come together to form any medication. The API is the portion of a drug that has therapeutic effects on the body, the chemical compound that makes one feel better. Inactive ingredients are the non-medicinal, but important and necessary, components of the drug.
Big demand but imports on slide
The pharma hub, which produces primary life-saving, anti-inflammatory and anti-viral medicines that are also exported, fears that further delay in shipments from Shanghai and Shenzen could lead to a shortage of raw material.
“There is a big demand for API but imports are on a slide, leading to the shortage. It’s worrisome for the pharma industry,” says Rajesh Gupta, the president of the Himachal Pradesh Drug Manufacturers Association (HPDMA).
“The worst thing to happen to the stock market and any economy is supply chain disruption. I was seeing the satellite image of ships docked at Shanghai port. Get ready for a massive supply chain shock. A huge cost impact is expected in the shipping world soon. Specifically, due to the shortage of containers,” he said.
The Himachal Drug Manufacturers Association (HDMA) has urged the Government of India to set up an API-monitoring cell for regulating prices of bulk drugs. The BBN industrial belt has about 650 pharma units. The ₹40,000-crore drug industry in Himachal Pradesh accounts for every second drug produced in the market.
“If the lockdown in China is prolonged, it can have an adverse effect on the manufacturing of pharmaceuticals drugs,” said State Drug Controller Navneet Marwaha.
Despite the Covid-19 induced lockdowns, the pharma units of Himachal Pradesh kept up the pace to manufacture emergency medicines required for treating patients.
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