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Drug industry in crisis as API prices skyrocket since second wave of Covid-19
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Laxmi Yadav, Mumbai
May 03 , 2021
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The steep rise in prices of raw materials over the last couple of months in the wake of their short supply has hit drug makers who are hard pressed to meet increased demand for pharmaceuticals amid the second wave of Covid-19.
Drug manufacturers in Himachal Pradesh’s Barotiwala-Nalagarh Baddi (BBN) industrial belt, touted as Asia’s biggest pharmaceutical hub, are the worst hit by the steep rise in the prices of active pharmaceutical ingredients (APIs) and packaging materials.
The drug units in the BBN belt producing several primary life-saving, anti-inflammatory, anti-viral, and Covid-19 drugs are dependent on 85 per cent of Chinese APIs. Since the outbreak of Covid-19, there has been a decline in the import of APIs from China, leading to its short supply in the domestic market. The shortage and uncertainty in the raw material supply resulted in their skyrocketing prices, said Rajesh Gupta, president, Himachal Pradesh Drug Manufacturers Association (HDMA).
There are several key APIs witnessing a steep rise in prices from March to April 2021. The price of ivermectin has gone up 200 per cent to Rs. 54,000 a kg in April from Rs. 18,000 a kg in March. The price of methylprednisolone sod succinate has zoomed 124 per cent to Rs. 1.9 lakh a kg in April from Rs. 85,000 per kg. The price of meropenam has jumped 72 per cent to Rs. 1.4 lakh a kg in April from Rs. 81,000 per kg in March. Doxycycline has also witnessed 60 per cent rise in price. It rose to Rs. 12,000 a kg from 7,500 a kg. The price of pipratazo spurted by 50 per cent to Rs. 10,000 a kg from Rs 6,700 a kg. The price of enoxaparin has recorded a 47 per cent rise. It has gone up to Rs. 25 lakh a kg from Rs. 17 lakh per kg. The price of paracetamol has jumped 45 per cent to Rs. 800 a kg from Rs. 550 a kg. The price of azithromycin has increased 30 per cent to Rs. 12,300 a kg from Rs. 9,500 a kg.
The other APIs which witnessed price hike included dexamethasone sodium (Rs. 40,000- Rs. 50,000 a kg), ornidazole (Rs. 900-Rs. 1,100 a kg), methylprednisolone base (Rs. 82,000- Rs 1 lakh a kg), amoxycillin (Rs. 1,825- Rs. 2,100 a kg), ceftriaxone (Rs. 6,450- Rs. 7,600 a kg), clobetasole (Rs. 69,000- Rs. 80,000 a kg), cefixime trihydrate (Rs. 7,500- Rs. 8,625 a kg), diclofenac sodium (Rs. 525- Rs. 590 a kg), pantoprazole sterile (Rs. 5,450- Rs. 6.000 a kg).
The price of Covid-19 drug favipiravir has seen almost five fold jump a kg. It has hiked from Rs. 19,000 a kg to Rs. 81,000 a kg.
Besides them, rates of all packaging materials have also gone up by 200 per cent. The price of aluminum foil has jumped 16 per cent to Rs. 400 a kg in April from Rs. 345 a kg in March. The price of PVC has also shot up 72 per cent to Rs. 175 a kg from Rs. 102 a kg.
“The abrupt spurt in API prices since the second wave of Covid-19 hits the country has made it unviable for drug manufacturers, especially MSMEs to continue production. Since the price of the drugs manufactured using these APIs is regulated under the drug price control order, their prices cannot be increased,” said Dr Gupta.
Due to steep rise in prices, manufacturers have put paracetamol supply to government agencies on hold, said sources.
The government has hardly taken steps to put in place an API monitoring cell to regulate API prices in the interest of drug makers, he added.
With the China run Sichuan Airlines’ decision to suspend the cargo flights to India for 15 days, the drug manufacturers feared that more trouble was in the offing.
Said Amit Chawla, general secretary, Madhya Pradesh Small Scale Drug Manufacturers Association, “The sharp rise in key API prices and packing materials over the last couple of months has left drug manufacturers especially MSMEs in dire straits. The suspension of cargo flight by Chinese airlines has added to woes of drug makers as we heavily depend on China from API supply. It is high time the government steps in to resolve the issue. Despite giving up margins on drugs, we are finding it extremely difficult to carry on production.”
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