Coronavirus challenge

The coronavirus outbreak has sharply brought into focus the Indian pharmaceutical industry’s overdependence on China for the import of active pharmaceutical ingredients (APIs), the vital raw material used to manufacture tablets, capsules, syrups etc. India sources about 70 per cent of the APIs, worth around Rs 17,000 crore, from China. The disruption of supplies due to the epidemic has raised the spectre of large-scale shortages and costlier generic drugs in India. The import bill has been on the rise as Indian API manufacturers can’t match the low prices offered by their Chinese counterparts. The Chinese government’s interventions at the infrastructural and policy levels have played a key role in boosting the growth of the API industry there. China has managed to create a robust research and development ecosystem, encouraging innovation and attracting international experts under its ambitious Thousand Talents Programme. Such measures have been conspicuous by their absence in India.

In its report submitted in 2015, the VM Katoch committee had recommended that the government should facilitate API production in India by setting up mega parks and special economic zones to reduce reliance on imports. The report had suggested that such parks should have common facilities managed by a special purpose vehicle, including common effluent treatment plants, assured power supply, testing laboratories and accommodation. It had also called for ensuring single-window clearance to the manufacturers so as to cut the red tape, besides tax-free status for 15 years for cluster developers. However, efforts to implement these recommendations have been half-hearted at best.

The Centre’s immediate goal should be to control the spiralling costs of imported APIs or make cost-effective alternatives available. In the long run, the government needs to treat the coronavirus crisis as an opportunity to handhold the API industry. The suggestions of stakeholders, such as the creation of an independent ministry for pharmaceuticals, should be given due consideration. Affordable healthcare will remain a distant dream unless the hyped ‘Make in India’ mission gets a booster shot in the pharma sector.