India's road to independence in API manufacturing

Seeking to permanently address India’s dependence on China for active pharmaceutical ingredients (APIs), the Department of Pharmaceuticals has drawn up a list of 56 APIs to prioritize them for the Make-in-India initiative. These include APIs that go into the making of essential drugs, such as antibiotics, anti-HIV medicines, and even paracetamol, reports The Pharma Letter’s local correspondent.

India's Council of Scientific and Industrial Research (CSIR) has started work in this regard, and has roped in the coal and petroleum industries to generate chemicals that form the main therapeutic components in various medicines.

India imports as much as 70% of its APIs from China. In some cases, including in the life-saving medicines category, the dependence on Chinese imports is as much as 80%-100%. This is particularly more in the case of fermentation-based APIs, such as penicillin, erythromycin, etc, where it is almost 100% dependence on Chinese import.

The import dependence of APIs and intermediates is particularly high for many of the low-value, high-volume and off-patent essential medicines that are used widely by the Indian population. Sizeable exports of generic medicines from India are also indirectly dependent on China for their raw material.

This February, the Indian government's announcement of a production-linked incentive (PLI) scheme for the pharmaceutical sector highlighted APIs that could be generated through fermentation rather than chemical, said an official.

The aim is to tackle end-to-end production of the 56 APIs with a priority on fermentation products. The CSIR hopes to have 10-12 APIs in the next couple of years.

The country’s dependence on China has been a matter of concern for several years, with the pandemic and resultant disruption in supply chain ushering in the need for strong measures regarding API independence.

Intermediates market estimated to be $12.94 billion

Speaking in Parliament, Mansukh Mandaviya, Minister of Health and Family Welfare, said the size of the API and intermediates market in India is estimated to be $12.94 billion in fiscal-year 2019-20.

The Indian government imported APIs worth $3.8 billion in FY 2020-21, according to data maintained by the Directorate General of Commercial Intelligence and Statistics. Exports were worth $4.42 billion.

Indian drug companies are looking to local API makers or trying to make them in-house in a bid to end reliance on China. Drugmaker Cipla (BSE: 500087) has launched an 'API re-imagination' program looking to expand its own manufacturing capacities using recent government incentives such as production subsidies, apart from working with local suppliers.