From mandating an import fee levy to ensuring regular power supply at affordable cost per unit to imposing higher registration fee on foreign suppliers of Active Pharmaceutical Ingredients (APIs), the Union government’s department of pharmaceuticals(DoP) is now working to ensure that Indian pharma companies reduce their dependence from China, the country which is the largest supplier of the same globally.
As per a recent media report “DoP has requested other government departments to chip in with measures to achieve this. The Department of Commerce has been asked to put up a system of ‘canalisation’, which means forcing the import of APIs through a government corporation while the Ministry of Power has been requested to ensure availability of power at cheaper rates for domestic API manufacturing plants. Also, the DoP has petitioned the health ministry to impose higher registration fees on imports and stipulate time-bound requirements for foreign companies, which are exporting active pharmaceutical ingredients to India, to establish their Indian production facilities.”
The move follows as a response to Ficci which highlighted the issue of revival of domestic API industry to reduce dependence on imports for critical drugs in 2017. India’s API imports from top five countries stood at Rs 18,372 crore in 2016-17 with China accounting for 66 per cent, according to the government data.
“India continues to rely on imports of key starting materials, intermediates and APIs on China, with the share of dependence increasing over time. This potentially exposes us to raw material supply disruptions and pricing volatility,” stated a study released by Ficci at the India Pharma 2018.
It was in 2017 at the India Pharma event that the industry indicated to DoP on its inability compete with China in terms of commercial scale. In response to industry’s concerns, the DoP informed the Ficci that it has prepared an umbrella scheme for development of pharma industry. “One of the component of this scheme is part-financing of government facilities in three bulk drug parks. In-principle approval of Department of Expenditure has been received and EFC (Expenditure Finance Committee) memo has been prepared and circulated for comments,” stated the media report.
In 2015 which was the Year of the API, no efforts were made to recognise the industry’s challenges. However the government formed the Katoch committee on APIs to formulate a long term policy and strategy for promoting domestic manufacture of APIs/bulk drugs in the country, has recommended revival of public sector units (PSUs) for starting the manufacture of selected and very essential critical drugs like penicillins, paracetamol etc.
In its recommendation, which has been submitted to the government on September 2015, the panel said that revival of public sector units for starting the manufacture of selected and very essential critical drugs including penicillins and paracetamol among others. Where feasible, it would be necessary to evolve ways and means of utilizing the resources available in public sector units such as IDPL for setting up API industry. Infusion of capital about Rs. 500 crore each is recommended to these units to start manufacturing important APIs in the very near future.
To facilitate ease of business in the API sector, the Katoch committee further recommended that in order to ensure single window clearance to manufacturers and provide common facilities and other support, the department of pharmaceuticals should have an institutional mechanism which could work in synergy with other important departments such as ministry of environment and forests, ministry of coal, department of financial services, department of revenue and others have units co-located at the site.
On the research and development (R&D) front, the committee recommended stronger industry-academia interaction by facilitating the to-fro movement of scientists between industry and academic institutions. It also stressed on institutional mechanism for ministry of human resources, and various science departments/agencies like DST, DBT, CSIR, ICMR etc to work together/in synergy on R&D relevant for best procedures of production.
It also suggested setting up of mega parks for API manufacturing with facilities like assured power supply and effluent treatment plants.
The DoP has also asked the health ministry to introduce a mandatory system of consignment-wise testing requirement, which would be on similar lines as practised in China. It has also asked the health ministry to advise government procurement agencies to adopt differential policy for procurement so that it benefits API industry, stated a media report.
In order to sort out the API issues, the DoP has insisted on higher registration fee for imports comparable with international regulators; increase the time frame for according registration to overseas companies for marketing the bulk drugs in the country; put in place stringent documentary and quality-related requirements for site inspections and evaluation by Indian drug regulators; for the foreign companies exporting to India, stipulating time-bound requirements for establishing local production facilities in the country after getting registration for marketing the bulk drugs in India.