Cost of raw materials for drugs soar in India

The drastic increase in prices of key active pharmaceutical ingredients (APIs) from 11% to 51% and excipients from 11% to 61% over the past one month has got Indian pharmaceutical industry associations seeking an urgent redressal from the Department of Pharmaceuticals. Factory shutdowns and production cuts in China have been termed the main culprit.

The power crisis in China threw the Indian pharma market off-gear, leading to soaring API prices. Exacerbating the problem was the hoarding of key APIs like paracetamol and azithromycin by certain traders, which hampered India's pharmaceutical industry business.

Indian players roughly import 66%-70% of their bulk drug requirements from China.

The price increase has had a cascading effect on the viability of the pharmaceutical business, said an official, adding the unviability could soon lead to stock-outs and shortages even for important formulations.

Drugs with significant hikes

The prices of most APIs have risen by 25% to 300% over the last few months. For instance, paracetamol prices have risen to be in the $11.29 to $13.44 per kg range, up from around $4.0 per kg before the COVID-19 outbreak. Prices of widely used solvents like methanol have also gone up, rising by 59% in the last six months. The cost of tetrahydrofuran (THF), another solvent, has risen by 150% in the same period, added the official.

Estimates show that guaiphenesin, a key API used in medicines for allergies, common cold and flu, has jumped from around $7.39 per kg to over $10.75 per kg, while metformin, a key diabetic API, has increased from around $3.36 to over $5.10 per kg, an increase of 51%.

Spironolactone, used in drugs to treat liver disease, kidney ailments, high blood pressure and heart failure, has seen price increase from $225.22 to $285.39, up 27%. Phenylephrine HCL, used in drugs to treat breathing illnesses like sinusitis and bronchitis, has seen a price increase of 20% and ramipril used to treat hypertension, has seen a jump of 11%.