The acute shortage of APIs and excipients caused by the short supply of these products from Chinese market will linger for some more time even after the Olympics in August this year as the Chinese government has asked the industrial units, which were closed on pollution grounds, to adhere to the pollution norms before reopening these units after the Olympics.
According to sources who visited China recently, the Chinese government has asked the industries to strictly stick to the pollution norms even after the Olympics. In this regard, the Chinese government is offering soft loans to the industry to upgrade the industrial units by installing the latest pollution control equipments to bring down the pollution to internationally accepted levels.
This clearly indicates that there is no immediate solution to the issue of short supply from China. As the industrial units will have to set up latest pollution control equipments as per Chinese government directive, it may take some more time after the Olympics, which will come to a close in the last week of August. The Chinese supply may not be normalised at least before October this year, sources said.
The Chinese government had some time back ordered the closure of several industrial units, including several pharma units, in and around Beijing due to the forthcoming Olympics in August this year to avoid criticism from the advanced countries due to the high level of pollution of these industrial units.
The closure of these units in China had a severe effect on markets like India as India was solely dependent on cheap Chinese market for APIs, excipients and other products like solvents and chemicals. The short supply from China triggered an unprecedented rise in prices of APIs, excipients and chemicals threatening the very availability of commonly used medicines in the country. More than the price rise, it is the unavailability of these products which made things worse for the industry in India. The pricing mechanism of the national pharma price regulator, in which it does not allow more than 10 per cent increase in medicines in a year, made things worse for the industry.