Government plans to reduce pharma industry's dependence on China.

NEW DELHI: The government has initiated a process to reduce Indian drug industry's growing dependence on China for raw materials, including the critical penicillin, which is needed to manufacture most of the anti-infective drugs.

An industry executive told ET that the Organisation of Pharmaceutical Producers of India (OPPI) has submitted a list of drugs sought by Commerce Minister Anand Sharma when the Group of Ministers met on May 25.

The minister had asked the industry body to share details of the drugs, out of the 74 price controlled bulk drugs whose production has either shifted to China or whose manufacture in India has become dependent on imports from China.

India needs to be self-sufficient to achieve its goal of becoming a major global supplier of low-cost drugs, an industry executive said, adding that the OPPI, an association of multinational firms, conveyed this to the commerce ministry officials.

India fixes the retail prices of drugs that are made from 74 bulk drugs - active pharmaceutical ingredients or intermediates, the basic chemical used to make a medicine. Though the 62,000-crore Indian industry ranks among the global players in finished drugs, it has to depend on China for raw materials.

The minister had raised this issue in the earlier meeting of the group of ministers on April 25, recommending an inter-ministerial consultation to tackle this "serious threat in the drug security of the nation". He had pointed out that the country was dependent on China for penicillin, the key raw material for most antibiotics in the country.

According to industry body Indian Pharmaceutical Alliance's secretary general DG Shah, health ministry data shows that about two-thirds of raw materials used by Indian companies are imported from China. "We are practically dependent on China. This is a serious issue," he said.

Most anti-infective drugs, accounting for about 20% of the Indian drug market, are made using two derivatives of penicillin, Pen G or 6APA, Shah said.

Last year, the commerce ministry had unsuccessfully recommended imposing anti-dumping levy on penicillin imported from China and Mexico. It was alleged that whenever Indian companies tried to revive their local manufacturing plant for penicillin, the Chinese companies slashed prices indiscriminately to scuttle competition. Most Indian companies that used to manufacture penicillin have closed their units.

The finance ministry had shot down the commerce ministry proposal due to concerns that prices of popular antibiotics would increase significantly if levies were to be imposed on Chinese imports to encourage Indian companies.

Source : economictimes.indiatimes.com