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An Opportunity for India

With the import of active pharmaceutical ingredients from China being hit due to Coronavirus, India should revive its own market by setting up fresh manufacturing centres and give incentives to this industry. By Dr KK Aggarwal

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India produces a third of the world’s medicines, mostly in the form of generic drugs. But more than 80 percent of the raw materials or active pharmaceutical ingredients (APIs) for these drugs are imported from China. That gives it a virtual monopoly over pricing and supply, so much so that there are no domestic producers left for many essential medicines in India.

An API, incidentally, is the most basic building block or component of a medicine. For example, acetaminophen (paracetamol) is the chief therapeutic entity in aspirin or crocin.

Latest statistics from the Directorate General of Commercial Intelligence and Statistics tabled in Parliament reveal that in 2016-17, of the total import of bulk drugs and drug intermediates of Rs 19,653.25 crore, China constituted 66.69 percent (Rs 13,107 crore). In 2017-18, India imported Rs 21,481 crore worth of bulk drugs and intermediates, and the share of China increased to 68.36 percent (Rs 14,755 crore). Chinese imports levelled at 67.56 percent (Rs 17,263 crore) in 2018-19, still the largest share in total Indian imports worth Rs 25,552 crore. Also, overall India’s dependence on imports of bulk drugs and drug intermediates has gone up by 23 percent from 2016-17 to 2018-19.

The Department of Pharmaceuticals (DoP) in the ministry of chemicals and fertilisers said that the imports from China are due to economic considerations. This essentially means that Chinese imports are cheaper and more cost-effective for pharma manufacturers. Though India looks at other sources like the US, Italy, Singapore and Hong Kong for such imports, there is fear of a sharp spike in the price of finished drugs when APIs are imported from other countries apart from China. And even as India’s dependence on imports is considerable, policies formulated by the government to minimise this and give a fillip to indigenous manufacturing have remained only on paper.

It was six years back that the Congress instituted a high-level committee to fight the heavy dependence on Chinese bulk drugs. Later, the National Security Advisor had warned that this dependence could be a national security threat. Apart from the dependence on legal imports, a large number of illegal imports of APIs from China were also a cause of worry for the regulator.

In another reply tabled in Parliament, the DoP informed that an inter-ministerial task force was also constituted under the chairmanship of the minister of state (chemicals and fertilisers) on April 18, 2018 to formulate a road map for enhanced production of APIs in India. Unfortunately, the task force has not even met every alternate month since August 2018, when ideally it was supposed to meet every month to take crucial decisions for boosting API production in proposed bulk drug parks.

The DoP has a scheme—“Assistance to Bulk Drug Industry for Common Facility Centre”—for providing assistance to the bulk drug industry for a common facility centre in any upcoming drug park promoted by state governments or state corporations, the ministry stated.

Only in-principle approval was given for constructing these parks now in Himachal Pradesh, Telangana, Andhra Pradesh and Assam. It will be a couple of years before the projects see the light of day.

India also more than doubled the import of antibiotic drugs from China in recent years and the trade is now worth billions of dollars. There are now no domestic producers left for penicillin and its derivative. There was always a fear of a public health crisis if China were to ever stop its supply. This has now come true after Covid-19 created a shortage of essential medicines as India has been dependent on China for many APIs. Drug companies blame the government, saying that low-cost imports have forced many manufacturers to close down. Some have now given up producing ingredients for other drug manufacturers and gone on to produce more complex formulations themselves, which they then export to developed markets in the US and Europe. Bureaucracy and lack of environmental clearances in India have also made it uneconomical to produce raw materials anymore.

However, switching back to mass production of raw materials is not difficult or too late. If the government acts quickly, things can turn around in less than 10 years.

Just as India is dependent on China for many APIs, other countries are dependent on India for other APIs. So there are companies which import in bulk from China and export in small amounts.

The Directorate General of Foreign Trade (DGFT) has now restricted the export of 26 APIs—paracetamol, tinidazole, metronidazole, acyclovir, Vitamins B1, B6 and B12, progesterone, chloramphenicol, erythromycin and clindamycin salts, neomycin and ornidazole—with immediate effect as the Covid-19 epidemic in China is seen affecting their supply. Companies planning to export these products will have to secure a no-objection certificate from the government. The government’s list of 26 APIs and medicines accounts for 10 percent of all Indian pharmaceutical exports.

It is unclear how the restriction would impact the availability of these medicines in countries that import from India and also depend on China. In the US, for instance, Indian imports accou­nted for 24 percent of medicines and 31 percent of medicine ingredients in 2018.

It is time to build infrastructure to make them in India. The government has decided to set up a 10-member technical committee to revive India’s lost capacity to make certain crucial drug ingredients. The committee is expected to suggest ways to revive India’s API segment, especially fermentation-based APIs. One of the duties of the committee is to look into the cost of setting up fresh API manufacturing capacities to wean India off its dependency on imports of these products. Around 58 such ingredients had been identified, including amoxicillin, Vitamin C, neomycin, acyclovir and tetracycline.

The Drug Controller General of India gave a list of these 58 key drugs (for which India is heavily dependent on China) to associations such as the Indian Pharmaceutical Alliance, Indian Drug Manufacturers Association and the Organisation of Pharmaceutical Producers of India and asked them to inform the government about the status of raw material stocks for manufacturing these drugs. These include blood pressure medication Telmisartan, antibiotics such as Levo­floxacin and Azithromycin, statins such as Atorvastatin and Rosuvastatin and a few vitamins.

The list also includes antiretrovirals such as Lopinavir and Ritonavir that have been approved by the ICMR for treating coronavirus affected patients. The key concern was in the case of anti-diarrheal drugs such as metronidazole and ornidazole for which Indian manufacturers depended heavily on China for APIs. To reduce the reliance on China, it was important that the raw material used for manufacturing APIs is also made in India.

China offered many advantages such as free land, low-cost utilities like water, steam and power and negligible financing costs. China had reformed its drug approval processes to shorten schedules. It put in place a priority review process for drugs for critical conditions and reduced the time it took to approve process changes in clinical trials. Medi­cines for anaemia and bowel cancer are manufactured in China and imported by India.

So what does India need to do? Firstly, it should rationalise the prescription of drugs. Medical Council of India ethics regulation 1.5 on the use of generic names of drugs says: “Every physician should prescribe drugs with generic names legibly and preferably in capital letters and he/she shall ensure that there is a rational prescription and use of drugs.” This would mean practising only evidence-based medicine. Restrict the use of paracetamol for high fever and don’t misuse tinidazole and metronidazole for acute diarrhoea and vitamins B1, B6 and B12. Antibiotics such as chloramphenicol, erythromycin, clindamycin salts and neomycin in any way have restricted uses. The government should make a list of non-essential drugs in shortage so that all doctors are aware about them and do not write them if not essential.

To promote the API industry, the government should give its manufacturers free land, low-cost utilities such as water, steam and power and negligible financing costs. It should also liberalise policies for clinical trials and approval of already approved drugs in other countries. It should also liberalise the conditions for clinical trials. What is the idea of testing in India if the trials have already taken place in China (Mongolian population), Sri Lanka (Dravidian population) and Nepal (Aryan population)?

The new India effort will also imp­rove the safety and quality of drugs. Last year, the FDA issued an alert over a cancer-causing ingredient, NDMA, used in the blood pressure medication losartan and valsartan, made by Chinese company Zhejiang Huahai.

This resulted in the recall of such drugs all across the globe. Also, last year, a scandal over tainted vaccine doses sold in China led to the arrests of executives of Changsheng Biotech, which was also accused of forging data during the production of a rabies vaccine given to infants.

So it is time for India to become self-reliant in APIs to prevent another shortage like the one the coronavirus has inflicted on it.

 —The writer is President, Confederation of Medical Associations of Asia and Oceania, and Heart Care Foundation of India

Lead Picture: UNI

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