NEW DELHI: The small pharmaceutical industry is opposed to imposition of safeguard duty on import of antibiotic bulk drugs 6APA and erythromycin
from China. In a letter to the department of pharmaceutical, the small pharmaceutical industry confederation (SPIC) said that a safeguard duty, if imposed, would favour only one manufacturer that produces these bulk drugs in India. They argue that one company cannot meet the demand for the bulk drugs and a safeguard duty could lead to rise in domestic prices of the drugs.
A safeguard duty can be imposed by a country on a product if there is an import surge leading to disruption of the domestic market.
“The sole manufacturer, Alembic, does not have the capacity to meet the demand of the Indian market for Penicillin and Erythromycin,” SPIC vice chairman Lalit Kumar Jain said in the letter. While penicilin is the main raw material used to make antibiotic 6APA, erythromycin is used to make antibiotics given to people allergic to penicillin.
Recently the commerce ministry had sought the views of department of pharma asking it to examine if there is a need to intervene or impose a safeguard duty on imports of bulk drugs 6APA and erythromycin from China. The move came in the wake of some drug makers asking the government to intervene and protect the local firms against imports from China.
“Erythromycin, when imported from China, costs around $58 per kg but manufacturing cost in India is about $80-$90 per kg. Hence, the only Indian company manufacturing the bulk drug finds price competition in the market. But, safeguard duty as a general rule is imposed where three or more manufacturers are there and they have the capacity and quality to meet the demand. In this case, since only one manufacturer is there, it will lead to monopoly and exploitation by increasing the price of end formulations in the Indian market,” Mr Jain said.
As per data available with the government, imports of both 6APA and erythromycin from China more than doubled during April-November 2008. While the value of 6APA imports touched Rs 370 crore during the period, erythromycin imports crossed Rs 200 crore. India imports around 1,200 tonnes erythromycin thiocyanate every year from China. India also imports around 250 tonnes 6APA and a penicillin G from China.
Source : The Economic Times