HYDERABAD: The government is looking to promote domestic pharma companies' tieups with bulk drug

makers in Italy to cut dependence on China for pharmaceutical ingredients.

India sources over 70 per cent of its requirement of bulk drugs (ingredients) from Chinese pharmaceutical
companies.
A senior commerce ministry official said the government, which will unveil a new bulk drug policy soon, is
preparing schemes aimed at wooing Italian drug makers with attractive incentives as a part of its 'Make in
India' initiative.

"The ministry is asking Italian drug makers to forge alliances with Indian pharmaceutical firms to set up
joint ventures in India," PV Appaji, director general of Pharmaceuticals Export Promotion
Council (Pharmexcil), told ET. "The move is primarily aimed at reducing the dependence on China, even
while encouraging domestic pharmaceutical firms towards backward integration that ensures greater cost
efficiencies and quality control."
Appaji said the proposed new bulk drugs policy is being given final touches to include attractive incentives
to lure global bulk drug manufacturers in general, and Italian firms in particular, given their technological
strength in manufacture of crucial bulk drugs for life-saving medicines.
At present, India depends largely on China for common essential bulk drugs such as
Paracetamol,Metformin, Pen-G, 6-APA, Aspirin, Erythromycin Thiocinate, Sartans, Ofloxacin, Levofloxacin
and Vitamin Cfor intermediates, and Metronidazole, Vitamin C, Ofloxacin and Levofloxacin for active
pharmaceutical ingredients (APIs). While India produced about $10 billion worth of APIs last year, its
export of APIs remained flat at $3.6 billion. As against this, the subcontinent imports around $3.5 billion
worth of APIs every year, mostly from China.
The top 100 Indian medicine manufacturers depend on China for at least half of their API requirement,
and at least 150 medicines classified under the National List of Essential Medicines (NLEM) depend on
Chinese imported bulk drugs.
Italy is the world's third largest API producer with about $4 billion and exports more than three fourths of
its production, mostly to the US market. Among the prominent Italian API producers are FIS (Fabbrica
Italiana sintetici), Angelini Pharmaceuticals and Trifarma.
According to Pharmexcil's director general, since some Italian firms have shown interest in forging
alliances with Indian drugmakers, the commerce ministry plans to hold another dialogue with Italian drug
makers in October.
Increased cost of production and other European economy related constraints had led to several local
drug makers shutting down their unviable units.
"Technology transfer agreements from Italian drug makers is also being actively pursued," Appaji said.
Jayant Tagore, president of India's Bulk Drug Manufacturers' Association (BDMA), said overdependence
on a few suppliers for key bulk drugs is turning alarming. The factors working against domestic bulk drug
makers include fragmented capacities, high cost of land and power, absence of adequate incentives and
reservation of certain products for the small scale industry, he said.

The Indian bulk drug or active pharmaceutical ingredient (APIs) manufacturers are facing a
health security risk due to increased dependence on import of bulk drugs from China. A recent
KPMG India analysis of imports data of nine strategically important intermediates suggests that
by having a majority share in imports, China has achieved a near-monopoly in the Indian import
basket of critical intermediates and APIs.
This has created a huge loss for bulk drug manufacturers, resulting in either becoming sick or on
the verge of closure.
There are approximately 300 large companies and over 10,000 medium and small-scale
companies in the sector, of which 77% manufacture formulations and 23% of units manufacture
APIs.
In the wake of increasing imports from China, the bulk drug manufacturers, especially the small
and mid-sized, have approached the department of pharmaceuticals under the ministry of
commerce seeking revival measures due to Chinese competition. Bulk drugs constitute nearly
25% of the pharma exports from the country. Exports from India are Rs 98,000 crore and bulk
drugs and intermediates account for nearly 25%. However, there has been an increasing
competition from China which has led to a stagnated growth in the bulk drug exports, Dr PV
Appaji, Pharmaceutical Export Promotion Council of India (Pharmexil), said inaugurating
2015-The Year of Active Pharmaceutical Ingredients seminar in Hyderabad. The pharma sector
has a significant presence of small and medium companies with revenues of around Rs 60,000
crore which contribute 40% of the volume and value and the rest is contributed by large
companies with revenue more than Rs 90,000 crore. These API manufacturers not only export
50% of the production to various countries, but also meet majority requirement of the domestic
formulations units.

India has been witnessing the trend of steadily increasing import of APIs,
intermediates and excipients from China at very low prices for some years
now. While the formulation industry felt happy in sourcing cheaper Chinese
APIs, the bulk drug industry in the country has been objecting to such
imports as that started hitting the very existence of bulk drug units here.

According to the Department of Pharmaceuticals, almost 40 per cent APIs

required in the country are being imported from China. Although the
formulators were getting benefited by cheaper imports of APIs from China,
the government was concerned as these imports were posing a threat to
domestic API industry. In fact many small and medium scale API units had
closed down during the last five years. It was in the background of this
scenario, the Department of Pharmaceuticals sought stern measures
including anti dumping duty on API imports from China. Even these attempts
from the government did not yield the desired results and Indian bulk drug
industry continues to suffer. It has to be remembered that India had emerged
as a leading producer and supplier of quality APIs to the global pharma
industry

only

two

decades

ago.

Apart from cheaper imports affecting the domestic bulk drug industry, poor
quality of APIs and intermediates coming from China, of late, is causing
serious health issues in India as these APIs are used for the manufacture of
formulations marketed in the country. To ensure only quality APIs and other
materials are imported into India, the health ministry had started the
exercise of checking the GMP facilities of foreign manufacturing sites some
time back. Six bulk drug manufacturing units in China were inspected in May
2011. Registration Certificate and Import License of one unit inspected was
cancelled. Again in March 2012, four manufacturing units in China were
inspected and in one case, registration certificate was cancelled. But the
problem persists and substandard materials are somehow still reaching the
Indian formulators. In fact, some of the traders are even importing large
quantities of bulk drugs claiming them as intermediates. It is quite possible
that one of the reasons for recent rejection of some batches of generic drugs
from India by the US and Europe is on account of the use of substandard APIs
imported from China for their export production. The Drugs Technical
Advisory Board has already asked the DCG(I) to ensure that the imports into
the country should be permitted only after ensuring that the documents
submitted by the manufacturers are authentic and duly verified. The issue
calls for tough action against such imports for the very existence of Indian
pharmaceutical industry and health of the people of the country

`80%-90% essential
drugs being imported
from China'
Chethan Kumar
Bengaluru:

If Prime Minister Narendra Modi's `Make in India' mantra has to be implemented in

some sector first, it has to be in the pharma industry. The reason-in the past four
financial years, India has imported from China bulk drugs and active pharmaceutical
ingredients (APIs) worth about Rs 38,186 crore.Most of these have gone into making
essential drugs.
In November TOI had reported that national security adviser Ajit Doval had warned
the government about overdependence on China.
If submissions to the government by the department of pharmaceuticals are any
indication, there is signifi cant dependence on imports in the case of 12 essential drugs.
Approximately 8090% of these (essential drugs) imports are from China, the
department has said.The decision is based on economic considerations.
The 12 drugs are-paracetamol, metformin, ranitidine, amoxicillin, ciprofloxacin,
cefixime, acetyl salicylic acid, ascorbic acid, ofloxacin, ibuprofen, metronidazole and
ampicillin. Eight of these are on WHO's Model List of Essential Medicines.

Documents of the department of pharmaceuticals show there has been a consistent

growth in the import of drugs and APIs from China.In 2011-12, Rs 8,798 crore worth of
bulk drugs and APIs were imported from China.The corresponding figure was Rs 11,000
crore

in

2012-13,

Rs

11,865

crore

in

2013-14

and

Rs

6,521

crore

during

AprilSeptember in 2014-15.
China out-prices India when it comes to APIs and bulk drugs, Sudhansh Pant,
joint secretary , department of pharmaceuticals, told TOI from Delhi.