A severe shortage of basic chemicals and their high prices are threatening the very survival of the bulk drug industry. Some of the widely used chemicals and solvents like phenol, sulphuric acid and caustic soda are in extreme short supply in the market.

If the situation continues like this for some more time, the industry sources said, there will be no option before the industry but to stop production of bulk drugs. A situation like this can lead to severe scarcity of even commonly used medicines in the country.

Manufacturers who deal with the bulk drugs said that the prices of basic chemicals, which are used as building blocks in the bulk drug industry, have increased ridiculously during the past some months mainly due to the short supply from China. Besides the exorbitant price rise, what is more worrying the manufacturers are the unavailability of these products. Price rise coupled with the unavailability of products is threatening the industry to shut down the shops, sources said.

The prices of sulphuric acid, which is a basic chemical used for all APIs (active pharmaceutical ingredients) has increased from around Rs three per kg some months back to Rs 16 per kg now. The prices of amiline oil, another basic chemical used as dyes intermediate, has increased from Rs 50 per kg to Rs 115 in a matter of couple of months. Another major product phenol, which is widely used as solvent by the pharma industry, is not quoted in the market as the product is not available in the market, sources said.

Likewise, the prices of erythromycin, which was quoting US $38 per kg, have increased to more than US $70 per kg. Besides the horizontal variation in price, there is a sharp drop in availability of the product. Another product diethyl malonite has also registered sharp increase in prices from US $1.7 per kg to $3.9 per kg. The prices of nbutamol has increased from Rs 50 to Rs 80 per kg and the prices of caustic soda also increased from Rs 1150 to Rs 1400 per 50 kg bag, all in a matter of two months, manufacturers said.

Experts are of the opinion that the industry, which is already reeling under the pressure of rising prices and acute shortage of APIs and excipients, will be under added pressure due to the unprecedented rise in prices of chemicals and its shortages. The ridiculous rise in prices will force the industry to stop production for some time till the situation is normalised, sources said.