Exports of bulk drugs and intermediates from India grew in double digits during the financial year (FY) 2019, a period that was marked by drug shortages in the global market owing to supply disruptions in China. India's domestic market, too, was plagued by shortages of bulk drugs as the pharma industry depends on imports from China.
According to data released by the Pharmaceutical Exports Promotion Council (Pharmexcil), exports of bulk drugs and intermediates in FY19 stood at $3.9 billion, up 10.5 per cent over the previous year. The category contributes accounts for about 20.3 per cent of India's overall pharmaceutical exports.
Almost 60 per cent of the country's total bulk drug requirements is imported from China.
Bulk drugs or active pharmaceutical ingredients (APIs) are the raw materials used for making formulations or medicines. Intermediates are chemical compounds that are used in producing APIs.
Supplies from China were disrupted since the beginning of FY19 as Chinese companies were upgrading their plants or had shut them down due to environmental concerns. Around September last year, the Indian pharmaceutical industry had warned that as sourcing of APIs had become a challenge, pipeline stock was getting liquidated. The Indian Drug Manufacturers Association (IDMA) had told the government about the criticality of the situation, and had also requested the Centre to consider allowing flexibility to bulk drug makers in changing their product mix, as long as effluent load doesn’t increase.
Things, however, have stabilised now, say industry sources. "Supplies from China are more or less stable now. However, prices of some APIs have gone up as their cost of production increased after they took steps to address environmental concerns. At the same time, prices of some intemediates like amoxicilin have come down," said an industry source. He added that the supply crunch has done good for the Indian bulk drug industry, as API makers augmented their capacity.
Pharmexcil data showed that exports of bulk drugs grew throughout the year except in the months of July and September. In May, August and March last year, experts grew over 20 per cent. August saw the highest growth of the year in percentage terms, at 32 per cent, while March 2019 saw exports touch $443.88 million -- the highest in value terms.
"There was a disruption in the global market due to the Chinese situation. The Indian industry tried to cash in on the opportunity. The cost of production of APIs here is higher than that of China, which hampers the export competitiveness of our products," said a bulk drug maker who did not wish to be named. He added that while exports have grown, supplies to domestic players have not been disrupted.
"For many APIs and intermediates, India is dependent on China as most players avoid these as they are not viable. Chinese products are 35-40 per cent cheaper than Indian ones...either formulation makers prefer buying those, or they have back-end integration," he claimed.
Certain APIs and intermediates are not manufactured in India. These include the APIs for ascorbic acid (used to make Vitamin C supplements), Aspartame (used to make artificial sweeteners), Rifampicin (antibiotic), Doxycycline (antibiotic), Tazobactam acid (antibiotic), and steroids.
Intermediates for products such as atorvastatin (anti-cholesterol drug), ciprofloxacin (antibiotic), chloroquine (anti-malarial), gabapentin (anxiety drug), montelukast (to treat seasonal allergies), telmisartan (hypertension), cephalosporins (antibiotics), olmesartan (hypertension) are not available in India.
India exported bulk drugs and intermediates to 174 destinations during 2018-19. "Trading in bulk drugs for a year or so is following a different pattern due to sporadic shortages, which are a result of China’s regulatory policies and India could fill some of the supply gaps," Pharmexcil said.
Iran emerged as a major destination for APIs and intermediates exports India in FY19 as supplies to the West Asian country jumped 68 per cent jump in value terms. Pharmexcil said exports to Iran saw a negative growth of 25 per cent in FY17, FY18 and the first quarter of FY19. It has grown steadily thereafter.
Our exports to China also grew by 12.6 per cent, while that to Germany and Japan clocked around 25 per cent growth.