With Coronavirus knocking at the doorstep of India, the NITI Aayog has proposed to set up a corpus of Rs. 3,000 crore to build an incentive scheme for the manufacturing of active pharmaceutical ingredients (APIs)- the main raw materials in the production of finished medicines. Presently, the supply of such bulk drugs (API) has been severely hit due to the Coronavirus outbreak in China.
Indian Council of Medical Research (ICMR) had convened a meeting on Tuesday. According to ThePrint, It was at this meeting that the NITI Aayog officials revealed that they were planning an “incentive scheme with a corpus of Rs 3,000 crore,” along with the Department of Pharmaceuticals.
As per sources, the NITI Aayog, Aayog, Department of Pharmaceuticals, Finance Ministry and the Prime Minister’s Office are together working on a blueprint to slowly shift API manufacturing facilities from China to India.
The government is also considering handholding of API manufacturers where the investment is at least Rs. 500 crore, in setting up a new manufacturing unit.
Though India is a supplier of finished drugs to many countries, drug manufacturers import 70 per cent of their API needs from China. The supply chain however stands jeopardised with the Coronavirus outbreak in China virtually taking the shape of an apocalypse.
Many manufacturers in China have shut down owing to the epidemic. This is why the government in India has also placed restrictions on the export of 13 APIs and formulations made from them in order to prevent any shortages at such a critical time.
According to sources, 38 drugs have been identified in which the government wants to reduce dependence on Chinese imports.
While the final approval from the PMO is awaited, the government has in the meanwhile identified 23 API manufacturing facilities which had to shut down in India as manufacturers shifted to China due to cost-effectiveness. Now, it seems that the government wants to revive these facilities with the Rs. 3,000 crore corpus and proposed handholding of API manufacturers.
The government is looking at these 23 API manufacturing facilities because reviving them is relatively easier as these are ready facilities where a limited investment has to be made and shift production of APIs from China to India.
An industry representative who also attended the meeting convened by ICMR said, “The medium-sized firms — where API units are still functional but only to around 40 per cent of their total capacity — are the ones that can immediately boost production and help India combat the shortages caused by Chinese imports.”
Having been hit by Coronavirus, India is coming to terms with how production and supply from China are going to be hit in a big way. Thus, the NITI Aayog and other stakeholders in the loop are looking to find an effective substitute for Chinese supplies as far as APIs are concerned.
This might serve as an opportunity to knock out the Chinese bulk drug manufacturers and suppliers. With this, India might start competing on a global scale. And the pharmaceutical sector within India will become truly self-reliant from the stage of production of raw materials till the manufacturing of finished medicines.
While currently the revived manufacturing facilities will have the task of catering to the local market and avoid a crisis triggered by a dip in APIs supply, it will have wider implications in the long run in terms of reduced dependence on foreign supplies.