Desperately seeking a bulk drug prescription

What happens if China stops raw materials to India, asks Cipla doyen YK Hamied, expressing a worry that’s on the minds of many industry and government representatives following the ongoing military stand-off between the two countries.

In fact, the draft Pharmaceutical Policy 2017, unveiled days ago, devotes a sizeable chunk of its discussion to strengthening India’s bulk drug and Active Pharmaceutical Ingredients (API) capacities, given the country's excessive dependence on raw material imports from “one or two” countries (as it says, without mentioning China). The dependence on raw materials from China to make finished medicines in India is over 80 per cent, say industry representatives who do not wish to be named given the sensitive nature of the topic.

However, they point out, the discussion on bulk drugs has been simmering for several years now with no policy direction except the mention of bulk drug parks to support producers. The Government constituted the Katoch Committee in October 2013 to study and identify APIs of critical importance and work out a package of interventions ( see box ). In a parliamentary reply in 2015, the Government cited a Boston Consulting Group Report (2013) that pegged import of APIs at $3.5 billion, of which a large share was from China.

All this has not translated into much, says a young API maker. Bulk drugs have been given a “stepmotherly treatment” by the Government, he says, pointing to the tax-free zones and other concessions given to formulations (finished drugs).

Today’s producers of raw materials, bulk drugs and APIs are largely focussed on past products. “Where are the products of the present and future?” he asks, pointing to peptides, cancer products and biological products. Authorities view the production of oncology products as toxic, he says, adding ominously, “We are facing a possibility of no new oncology products being made in the country in some years, if this continues.”

Countries like Malaysia attract companies with their Government in support, he says. In India, bulk drugmakers have a difficult balancing act between rising expectations to keep up medicine supplies and keeping pollution levels in check. The Government needs to designate red zones where “polluting” industries are located, away from residential areas. Currently, industries are set up in designated industrial zones, but land-sharks are given permission to develop residential areas close by, he points out.

India has a huge potential in APIs, with land and people to do the job. But investments are barely being put into the research, development and manufacture of future products, he says, pointing out that even banks shy away from them. The Government’s policy needs to comprehensively address issues from pollution to financing, he says.

The current border skirmishes have cast a shadow on business, says a bulk drugmaker, because every filing in the United States mentions China as a source of raw material. If the situation escalates, finding a new raw material source and refiling will take another six months or more, he says. Dr Hamied calls for the revival of public sector units (PSU) to produce APIs that are critical to the country. “We tend to act only when the Damocles’ sword is over our heads,” he says, adding that complacency will set in again when the situation is sorted out. Making a commitment he has made several times in the past, Hamied offers the Government technical know-how on these products for the PSUs to make.

The Government needs to talk to bulk drug and API makers and devise a policy supporting them, says the young entrepreneur. At the other end of the spectrum, Dr Hamied says something similar. “I don’t know why they (the Government) don’t take us into confidence,” he says, given his 57 years of industry experience.

This is industry feedback, which the Department of Pharmaceuticals would do well to consider, as it discusses the draft Pharmaceutical Policy with stakeholders later this month.

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