Creating Self Reliance in Bulk Drugs in Response To Covid-19

Creating Self Reliance in Bulk Drugs in Response to Covid-19

The current adverse environment in China has exposed the vulnerability of Indian Pharmaceutical industry for its excessive reliance on China not only for its domestic market but beyond to export markets. The first immediate priority for the industry, if possible with the help of the government, would be to secure the short term supply of essential APIs and critical intermediates. However, to make the industry self sustainable and to ensure long term survival and competitiveness, the pharmaceutical Industry and Government must partner to make a fundamental strategic shift to build new strengths in API manufacturing.

 Challenges to individual companies are likely to be severe because of

  • Difficulty in forecasting accurately demand in the short and medium term.
  • Imbalance and depleted inventories of APIs, Intermediates and finished formulations.
  • Very high (over 70%) dependence on imports of APIs & Intermediates, especially from China.  
  • Ensure safety precautions in view of corona virus pandemic on movement of RM/ PM & Finished products.
  • High cost and long time required to switch source because of regulatory complexities
  • Long lead time & investment involved in setting up new API manufacturing plants.
  • Absence of clear policy initiatives by Government that support new investment by the private sector.

Though the year 2015 was declared as the ‘Year of Bulk Drugs’ very little was actually accomplished on the ground either in terms of new policy initiatives or financial incentives to the industry. Sporadic attempts since then by individual companies have also not been able to address this imbalance adequately and make it self-reliant. Perhaps the challenges thrown up by COVID-19 would encourage both parties to come together and address this issue in a way that would ensure India becomes not only self sufficient but a global leader in manufacture of APIs and critical intermediates.

The recent incentive of more than Rs 10000.00 crores proposed by DoP to strengthen the pipeline for APIs in India and boost domestic manufacturing is a very welcome initiative. This needs to be followed up simultaneously by

  • Creating an investment friendly environment through new policy initiatives and faster approvals.
  • Ensure availability of cost effective utilities (as it constitutes almost half the cost of manufacturing) to enable the companies to remain competitive against global players.
  • Incentivize investment in R&D and process innovation in key technologies.
  • Facilitate in developing chemical and pharma clusters for shared infrastructure and scale.
  • Promote partnership with existing but sick PSUs, to enable utilization of existing infrastructure, if feasible.

Existing and potential manufacturers of APIs in India should be encouraged to commit substantial resources in manpower; technology and direct investment to build capacity and capability.

In view of the current disruption in supply chain due to corona virus pandemic, while immediate focus of Supply Chain teams would be to mitigate the urgent problems and ensure continuity, focus must be maintained on the long terms growth opportunities. One way would be to create dedicated teams, distinct from the teams focusing on day to day operations, whose only goal would be to finalize and obtain approval of the expansion plans, prioritize pipeline of new APIs and intermediates based on technological complexity & potential, liaise with R&D & manufacturing for cost effective technology development and capacity creation.

It would need immediate identification & support of critical roles, contingency planning by identifying people who can replace one another quickly in case of unavoidable absenteeism and decrease risk of exposure through smart working and social distancing.

 Suingora Consulting LLP with its team of very experienced professionals can partner with individual companies to chalk out a plan and assist in monitoring and execution of such a plan. 

You May Also Like

About the Author: Ranjan Chakravarti

Management Consultant and Practicing Executive live coach passionately committed to helping aspiring professionals maximize their professional and personal potential, focussed on developing leadership capabilities, team building, communication and time management skills. Working experience with senior managers in local and international companies and also with leaders in international NGOs.

Leave a Reply

Your email address will not be published. Required fields are marked *