With the apprehensions of a possible shortage of drugs looming large in the market from next month, the authorities have stepped in to tide over the crisis with a number of measures encouraging the companies to continue with the production.

"With the high inflation rate impacting on the input costs, coupled with the shortage of APIs in the market, some companies may cut down the manufacturing of loss-making drugs. It may lead to some shortfall in supply of medicines from September. Hence the steps are being taken to help the companies a bit," an official of National Pharmaceutical Pricing Authority revealed.

The NPPA has recently hiked the prices of six bulk drugs and as many as 186 formulation packs with a view to give some respite to the manufacturers. It is also planning to incorporate the rising packaging and processing costs into the retail price. The notification for conversion, packaging and packaging materials, as per the annual exercise and assessment, is expected shortly, sources said.

After meeting with the industry leaders recently to take a first hand view of the situation, the senior pharmaceutical department officials are also apprehensive of possible shortage of drugs at least in some segments, due to rising costs of input materials and shortage in the supply of APIs from China. Besides, the materials coming from Taiwan, Korea and Europe also had gone costlier after Chinese supply fell.

Sources in the department indicated that they were closely monitoring the situation and would take steps to spur the manufacturers with some sops or possible relaxation in the 10 per cent price ceiling. The department had already held a number of meetings with NPPA to consider the revision of the ceiling limit.

Meanwhile, reports said that the restrictions in China and consequent crisis in India is likely to make a major in the world drug market with higher prices and shortage of medicines in prescription markets. India and China together supply 40 per cent of APIs used in US pharmaceutical production and it is expected to increase to 80 per cent by 2020. Any shortage in the supply would mean rise in prices of formulations across the globe, it is said.

An official from the All India Chemists and Druggists Association also said there would be likelihood of shortage of medicines as manufacturers are cutting down production of not-so-profitable drugs. However, he said as of now, there were no reports of shortage in the market.