Exports of Chinese-made active pharmaceutical ingredients (APIs), which either soared in price or disappeared altogether in the run-up to the Beijing Olympic Games, have begun to return to the market, and at affordable prices, according to Indian industry sources.
Chinese exports account for around 80% of the APIs used by Indian drugmakers. However, ahead of the Olympics, the Chinese government closed down domestic producers which failed to adhere to pollution control requirements, and those which were still in production increased their prices by as much as 50%. With their own stockpiles of APIs subsequently dwindling fast, Indian drugmakers had urged the regulator, the National Prescription Pricing Authority (NPPI), for authority to increase their product prices.
However, since the Games ended on August 24, and before the NPPI was forced to make a decision on prices, Chinese production of APIs has recommenced and export trade is expected to resume as normal soon after the Beijing Paralympics come to an end on September 17. Local sources also note that prices are returning to more normal levels, with, for example, penicillin G now being supplied for $9 per billion units, compared to $19 per billion units in August.
Indian pharma to grow 19.6% by 2015, says industry group
Meantime, a new report by the Confederation of Indian Industry (CII) forecasts that the national pharmaceutical industry will experience growth of 19.6% by 2015, driven by a number of factors including the expansion of the health-conscious, affluent middle class, which is expected to contribute 2% of the growth during the period.
Moreover, the country’s rural markets will account for a further 2% incremental growth, as rising disposable incomes of people in rural communities are likely to make them steady consumers of “old” products, the report suggests.
However, the CII believes that companies’ pricing moves and improved marketing efficiencies will contribute no more than 1% growth each, and that the widening availability of health insurance will impact the market only marginally, contributing an incremental increase of only 0.14%, even at optimistic growth rates. A further 0.5% growth can be achieved through differentiated products which are originated and developed Esin India and marketed globally, it adds.
Value creation and addition are key to the sector’s future, says the study, and it believes that many global drug majors will initiate collaborate alliances with Indian firms in research, manufacturing and even distribution. Moreover, India’s superior “adjustment capacity” in the face of oil price rises and food shortages will enable it to rank among the world’s developed economies by 2015 and to be driving the world market by then, rather than being driven by global forces, it says.
