Tensions Growing In India Over Dependence On Chinese APIs

London, 9 Feb 2018: An increased dependence on the import of active pharmaceutical ingredients (APIs) from China is raising national security concerns in India, with the Health Ministry contending it is technically destroying indigenous manufacturing, reports The Pharma Letter’s India correspondent.

The recent tension between India and China has prompted the government to undertake policy decisions with regards to the import of pharmaceuticals from China, tighten regulatory checks on medicines coming in from the neighboring country, and rally the domestic pharmaceutical sector to reduce its dependence on China for pharmaceutical products.

"Take a look at what has been happening recently," said a Health Ministry official. "India practically forced China's Fosun Group to acquire a lower stake of 74% in India's Gland Pharma. Its earlier bid for an 86.1% stake at $1.3 billion was blocked. The government is also planning major bulk drug parks, and initiating import curbs to boost manufacturing in India, all of which are signs that the government means business," said the official.

Dumping duty

India is likely to impose anti dumping duty on a chemical used in the pharmaceutical industry from China, Germany and Saudi Arabia, as the commerce ministry has started a probe into alleged dumping of the product following complaints from domestic players.

India's Directorate General of Antidumping and Allied Duties said it has established positive dumping margins as well as material injury to the domestic industry caused by the imports of Ofloxacin Acid from China, and recommended levy of antidumping duty. A final view will be taken by the Finance Ministry, said officials, adding that anti-dumping steps are taken to ensure fair trade and provide a level playing field to the domestic industry. and prostate.

At a recent meeting, the Department of Pharmaceuticals urged domestic drug companies to strive for self sufficiency in critical drugs like penicillin, rifampicin and insulin, in a sign of the government's concern over India’s dependence on Chinese imports.

Drug majors present at the meet said if stringent policy and trade barriers were not put in place, despite having world class assets, India would have conceded market share. Chinese suppliers dictating the price in the future also pose a threat to Indian players, and most Indian manufacturers said they were unable to match the API prices offered by Chinese suppliers.

Participants added if proper and regular inspections are conducted, many Chinese bulk drug exporters would be out of the game. Recently India’s drug regulator Drug Controller General of India (DCGI) banned the import of ingredients of drugs from six major Chinese pharmaceutical firms citing quality issues and rule violations.

Indian drug exports to China are insignificant in value terms, but Indian drug manufactures import raw materials worth $6 billion, according to the Pharmaceuticals Export Promotion Council (Pharmexcil).

Lack of essential medicines

Many key raw materials, mostly intermediates and APIs, are imported from China, which are used to manufacture at least 12 essential drugs. Some of these are paracetamol, ranitidine, ciprofloxacin, metformin, acetyl salicylic acid, ofloxacin, metronidazole, ampicillin, amoxicillin and ascorbic acid.

"At the National Institute for Research in Tubercolosis in Chennai a clinical trial was initiated to compare daily versus intermittent 6-month short course chemotherapy in reducing failures and emergence of acquired rifampicin resistance (ARR) in patients with HIV and pulmonary tuberculosis," said an official.

It was noticed that similar to an earlier country-wide shortage of tuberculosis drugs, rifampicin and streptomycin, parts of the state continued to register a shortage.

New research has also pointed to the lack of access to essential medicines in India, despite thousands being approved.

Researchers at the Newcastle University, UK and in Mumbai examined the drugs available for six common health needs: artemisinin (malaria), lamivudine (HIV/AIDS), rifampicin (TB control), oxytocin (reproductive health), fluoxetine (mental health) and metformin (diabetes). The study found that for each of the medicines there were multiple approved products listed in the Indian database, 2186 in total.

However, only metformin was easily available in 91% of the pharmacies studied, followed by rifampicin which was present in just above half the pharmacies (64.5%). The other four medicines were available in less than half.

In addition, the medicines were also available in fixed dose combinations (FDCs) and there are concerns already in India over the safety and effectiveness of these products.

In 2007, the Indian regulatory body, the Central Drugs Standard Control Organisation (CDSCO) banned 294 FDCs which had been approved by state authorities, but had never received central authorisation. In 2012, a further 45 FDCs were withdrawn.

Takeover hurdles

As pharma mergers and takeover battles begin anew in India, Gland Celsus and Strides Shasun appear to be the frontrunners to acquire Orchid Pharma, fighting against Nectar Lifesciences and private equity firm Blackstone, along with a host of other suitors.

Orchid Pharma exports APIs of antibiotics and has two US Food and Drug Administration-approved manufacturing plants. Sources indicated Orchid Pharma's bankruptcy reflects the state of India's API manufacturers. Though Indian drug makers are making their mark in formulation exports, API manufacturers have faced tough competition from Chinese rivals.

The takeover battle has also turned the spotlight on little known Gland Celsus, which is one of the group companies of Hyderabad based Gland Pharma, in which Chinese drug giant Fosun has a majority stake.

A red flag was raised last August on the Fosun-Gland Pharma deal, with India's Cabinet rejecting the deal on the basis of the transfer of unique technology from the Indian pharma company to foreign competitors.

API conundrum

Experts say that the government needs to revive the API industry by providing incentives to formulators to opt for indigenous APIs and allow control-free price to formulations made with indigenous APIs.

India and China have collectively more than 1,600 API manufacturing units.

India imported active pharmaceutical ingredients (APIs) worth $2.86 billion in 2016-17, of which the maximum was from China.

APIs estimated to be worth $1.90 billion were imported from China, followed by imports from Germany at $182 million, and the US at $123 million, and Italy at $100 million and Singapore at $37 million in 2016-17.The Pharma Letter