The hike in the prices of petroleum products has caused a steep rise in the prices of raw materials required for the pharma industry which faces acute shortage of active pharmaceutical ingredients (APIs) for formulation development and intermediates for APIs.
A large number of APIs and other materials for pharmaceutical products are manufactured from petroleum goods, and now the industry faces difficult to make large quantity of pharmaceuticals targeting global market because of the price rise.
“There are so many materials made from petrochemicals in pharma industry. Acetylsalicylic acid (ASA), the key element in various OTC pain medications, preparatory substances like phenol and cumene used for manufacturing penicillin and aspirin, plastic components for manufacturing bottles for keeping vaccines, blood, disposable syringes, resins used in drug purification procedures.etc are sourced petroleum products. The prices of all these products have increased by 50 to 100 per cent now,” says Himanshu Shah, president of the MP Small Scale Drugs Manufacturers Association (MPSDMA).”
Further, the manufacturers face drastic shortages of APIs which are imported mostly from other countries. Under the pretext of promoting API production in India, the government has increased the customs duty also. Industry sources are of the opinion that the government must give all possible support to the domestic drug makers to import sufficient raw materials from abroad until the country becomes self-sufficient in API production.
He said the import of APIs from China and other countries have come down and the available products are highly priced. The major sufferers are the units in the MSME sector where many of the units have either slowed down or stopped production due to lack of raw materials.
According to industry sources from other states, the drop in the import of raw materials mainly from China has hit the total pharma MSMEs and the situation has increased the prices of the available raw materials.
Speaking to the issues that led the industry into crisis, Himanshu Shah said even in this critical situation the government is imposing penalties on manufacturers for delayed supplies citing liquidated damages (LD). He said the industry cannot procure raw materials on time and cannot afford their prices. Even then, the manufacturers in the MSME sector operate their factories and work hard to fulfill the requirement of the government. But, if one or two days delayed, the authorities impose penalty on them. He wanted the government to give some relaxations to the industry during this critical time and exempt them from penalties for any so called LDs.