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Proposed cess on import of APIs stokes supply disruption fears.

Date: 27-02-2020
Subject: Proposed cess on import of APIs stokes supply disruption fears
NEW DELHI: A central panel has proposed that India impose a cess on imported Active Pharmaceutical Ingredients (APIs), which are used to make finished drug dosages, stoking concerns that it might further strain supplies facing disruption risks in the aftermath of Covid-19 outbreak in China.

“Cess not more than 1% may be imposed on imported APIs,” a senior government official said. The committee formed by the department of pharmaceuticals (DoP) has also suggested creating a drug security authority to handle such crisis in the future. The cess proceeds could be utilised to support the authority, it has further suggested.

“These recommendations will soon be sent to the DoP,” the official added.

The DoP had formed a committee earlier this month as traders started to raise prices of some bulk drugs for pharmaceutical companies amid the prolonged shutdown in China.

The committee has also recommended restricting export of 12 APIs and formulations, which include antibiotics such as chloramphenicol, neomycin, metronidazole, some vitamins like B1, B12, B6, and the hormone progesterone, to ensure that India doesn’t face any shortage of essential medicines in case the lockdown in China continues. These 12 APIs are imported from Hubei province, whose capital Wuhan is the epicentre of Covid-19 outbreak.

Indian drugmakers import around 70% of total APIs needs from China. As per the government data, in FY19, the drug-makers imported bulk drugs and intermediates worth $2.4 billion from China.

The federal committee has been closely monitoring imports of APIs and intermediates from China and the impact of Covid-19 on supplies to India.

The DoP had also asked drug regulatory authority Central Drugs Standard Control Organization (CDSCO) to examine to what degree India depends on China for bulk drugs, possible shortages of molecules and measures that can be taken to keep the situation under control.

The committee of experts formed by DoP comprised joint drugs controllers, officials from the directorate general of foreign trade and executives from pharma industry groups. The industry organisations included Indian Drug Manufacturers’ Association, Organisation of Pharmaceutical Producers of India, and Bulk Drug Manufacturers Association of India.

The government is also contemplating ways to encourage domestic manufacturing of APIs to counter a potential shortage of bulk drugs and intermediates.

Source: economictimes.indiatimes.com

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