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No shortage of Covid drugs: IDMA

Seeks cut in taxes on medicine; hails PLI scheme for pharma sector

No shortage of Covid drugs: IDMA
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No shortage of Covid drugs: IDMA

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The pharmaceutical experts have said that industry has managed to manufacture required quantity of essential drugs in the country during Covid-19 second wave. The Indian Drug Manufacturers Association (IDMA) said that the sector was able to produce both Covid and non-Covid related drugs despite various challenges including shortage of on-site workforce and restrictions in supply chain.

Viranchi Shah, Senior Vice-President, IDMA, told Bizz Buzz, that upon realising the surge in Covid cases, pharma companies scaled up their manufacturing capacities. He said that critical Covid related drug such as remdesivir saw increase in production from 38 lakhs injections/month to 1.2 crore injections/month since April and May. Similarly, Shah claims that given the surge in cases of black fungus in Covid patients, Amphotericin b drug production has also been increased by Ambalal Sarabhai Enterprises (ASE) by four times this year. The industry expert had said that they do not assume any significant long-term term losses for the pharma manufacturers, with some setback in the first quarter of Financial Year 2021-22.

"We had two major impacts. Number one was in Covid-related drugs, because of the sudden demand, the Active Pharmaceutical Ingredients (APIs) went up, and that's where our margins were hit. Companies continued with the standard price. We can't go to the government and use the arm-twisting technique. We had meetings with the government. And the government also said that increasing the prices would not give the right message to the society. So, you (manufactures) have to find the way to sustain for some months, it said. And we acceded to the government's request," said Shah

"It is not the right time to escalate the prices. Although all of us have suffered losses and profits were gone. So, that was one of the impacts where our bottoms lines will definitely be impacted. Everybody's profits get eroded as input prices are the same but the output is doubled," he added.

The IDMA vice-president explained that although the industry was impacted for the month of April-May, since workers could not come to the plants and manufacturing could not go on, the situation wasn't as severe as previous year's lockdown where supply chain was completely disrupted. Given the ongoing high demand of essential medicines, the Ministry of Chemicals and Fertilisers gave its nod to 46 companies for domestic manufacturing of critical Key Starting Materials (KSM) or drug intermediates and active pharmaceutical ingredients (APIs) under the Production Linked Incentive (PLI) Scheme.

Shah said that the decision will give a boost to the industry in the next two to three years and reduce the dependency on imports of essential drugs from countries such as China and Europe. According to him, out of about $ 9-10 billion industry of APIs, India is importing close to $ 3.5 to 4 billion of APIs directly. Out of total the import of KSM (out of which the APIs are manufactured), 67 per cent of those KSM and APIs come from China and rest from Europe and South-East Asian countries.

The IDMA however sought relief on customs duty on essential drugs. At present, the custom duty on medicine in India stands at 23.2 per cent after GST.

Archana Rao
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