Indian Pen-G Makers Want Output Cut 75%

India's Bulk Drug Manufacturers Association has told the government thatcompanies may have to cut production of penicillin-G to 75% of current output to stabilize prices. The proposed cut involves five major domestic manufacturers of penicillin-G, with total installed capacity of 5,310 MMU.

The Indian industry making penicillin-G has been hit by a slump in prices. The current average Indian market price for this product is about 475 rupees ($12.96) per MMU against the government's notified price of 1,025 rupees per MMU. Industry sources say the country has recently entered into making penicillin-G and has run into a series of problems. New plants bear a heavy burden on capital investment, and also have to pay relatively high interest costs. Moreover, India's climate is not conducive to the growth of penicillin-G culture, which involves high energy costs.