The Department of Pharmaceuticals (DoP) has convened an emergency meeting on July 21 to break the stalemate over the lingering issue of imposing of anti-dumping duty on imports of two pharma raw materials, penicillin G (Pen G) and 6 APA, which the industry fears will result in higher manufacturing cost of antibiotics. The estimated market for the antibiotics made from Pen G & 6 APA is is estimated to be around Rs 3,000 crore.

The DoP has invited major industry associations like BDMA, IDMA, FOPE, and the two affected pharma companies of SPIC and Alembic to discuss the issue threadbare. The imposition of anti-dumping duty on Pen G and 6 APA has been a contentious issue between the union commerce ministry and the bulk drug manufacturers in the country and the issue has been hanging fire for quite some time.

The commerce ministry, acting on a petition by Gujarat-based Alembic and Chennai-based SPIC, had recommended imposition of anti-dumping duty on Pen G and 6 APA, but the industry has been opposing it tooth and nail. Besides industry, Union Finance Ministry has also disagreed with the commerce ministry's proposal.

Opposing the Commerce Ministry's move, the bulk drug industry said that the proposed move could create a monopoly like situation in the country since there are only two companies (Alembic and SPIC) making the products in India and would ultimately result in shortage of life saving drugs (antibiotics) in the country. These companies together produce only around 200 MT of 6 APA as against the total demand of around 5000 MT per annum. Also, the production of Penicillin-G by the petitioner companies is only 3500 MMU as against the country's total demand of about 17000 MMU per annum.

The industry has also been cautioning the government about consequences of such a move on the common man in the country. It said that Penicillin-G is used as raw material for manufacture of many life saving drugs. In view of the proposed recommendations for anti dumping duty, the raw material cost of Penicillin-G will increase resulting in higher manufacturing cost which will be required to pass on to formulation manufacturers. With increased cost of these life saving bulk drugs by more than 38 per cent, the life saving medicinal formulations will be costlier by more than 76 per cent, as the DPCO allows 100 per cent MAPE (Maximum Allowable Post Manufacturing Expenses) on material cost. The 38 per cent increase in material cost will result in 76 per cent increase in medicine prices. Antibiotics and cephalosporins manufactured by using Penicillin-G and 6 APA as basic raw materials are the only prescribed medicines for all types of infections across the country, which means millions of Indians will have to bear the escalated cost of these life saving drugs.

The bulk drug industry also said that the objective of imposing anti-dumping duty will not be achieved as in the process of protecting the injury to two domestic manufacturers (Alembic & SPIC), around 30 bulk drug manufacturing companies will have larger injury.