After its onslaught on active pharmaceutical ingredient (API) units in India which saw closure of several bulk drug units in the country during last ten years, cheaper Chinese formulations are posing a major threat to the Indian pharmaceutical sector. Some major Chinese formulation companies have now started offering low priced drug formulations to the Indian market.
Several traders engaged in formulation import have received offers from Chinese formulation units quoting much lower prices than the Indian products. It is not possible to gauge how many thousands of formulations are going to flood the Indian market, but a tentative list indicates that more than 300 formulations are being contracted to be imported very soon.
While in the case of some formulations, the Chinese dealers have already quoted the price, others are under negotiation. "In case of some products, the quoted prices are more than half of the prices prevailing in India. The Chinese prices for formulations are expected to come down further after negotiations", a senior industry leader who is dealing with the issue said.
The formulations which are likely to hit the Indian market belonging to following therapeutic groups: amoxicillin, ampicillin, indomethacin, tetracycline, chloramphenicol, albendazole, clindamycin, cloxacillin+ampicllin, cefalexin, paracetamol+ amantadine hcl, oxacillin sodium usp, sibutramine, cimitedine, nimotipine, naproxen sodium, omeprazole enteric-coated capsules, tinidazole capsules, ibuprofen, phenylbutazone bp, atenolol, analgin, vitamin c, pyrazamide, cinnarizine, carbamazepine, rifampicin inisitol nicotinate, catopril, catopril, enalapril usp, piroxacam, griseofulvin, ketotifen, sucralfate, clotrimazole, acyclovir, oflaxaci, ciprofloxacin, famotidine, raniti dine, gemfibrozil, levodopa, amiodarone, isoniazide+rifampicin, isoniazide+ethambutol and ethambutol.
The entry of Chinese pharma formulations into India could pose a major threat to the formulation units here as they are likely to be hit quite badly by cheaper versions of Chinese products. Chinese manufacturers will be able to make their finished products at much cheaper prices as bulk drugs and intermediates are cheaper in China. Though the effect will be across the board, the small and medium units will be most affected.
Industry leaders foresee that the Indian formulation industry will also witness the same fate of the API industry. According to industry estimates, around 40 per cent of intermediaries needed for the industry here are now coming from China. Though the government periodically imposes anti-dumping duties to save the domestic industry, several companies dealing in API had to be closed down as they became financially unviable.
According to sources, the first target of the Chinese formulation industry is the medicine dispensing markets in the country. According industry estimates, the dispensing market strength is around 30-40 per cent of the total formulations market in the country.
Alarmed over the development, the pharma industry has urged the Union chemicals ministry to initiate steps to check this trend and devise appropriate strategy to counter the trend. The SME Pharma Industries Confederation (SPIC), a body which represents mostly small drug manufacturers, has already sent a memorandum to the ministry in this regard.
The small scale units, which are already reeling under the pressure of implementation of Schedule M will be in real danger once the cheap Chinese formulations enter the Indian market, SPIC leader Jagdip Singh said. It is high time the government did something to check this trend, he added.