Page 10 - newsletter 14 aug

Government approvals necessary to undertake
Khushboo Arya, XII E
“At present , the Indian pharmaceutical industry
is the world’s third largest drug producer by
volume and the country’s market
manufactures 60 percent of vaccines globally.
This constitutes 40 to 70 percent of supply to
satisfy the World Health Organization’s (WHO)
demand. As countries and companies alike
continue to grapple with the unprecedented
challenges thrown up by the novel coronavirus
(COVID-19), a specific area of concern has been
the uncertainty surrounding the impact of the
COVID-19 pandemic on the global as well as
Indian pharma industry supply chains. The
concerns have been aggravated by the fact that
COVID-19 struck first, and worst, in China, which
is the world’s leading producer and exporter of
Active Pharmaceutical Ingredients (API) by
volume. Indian manufacturers rely heavily on
APIs from China for the production of their
medicine formulations, procuring around 70
percent from China, the supplies were disrupted
for several weeks due to the situation as it
witnessed a lockdown of over two months from
January 2020 to March 2020, while it battled
COVID-19.
Some other issues being that the pharmaceutical
companies are facing is the shortage of
manpower due to the lockdown. Despite it being
an essential service, the lack of transport options
led to shortage of labour. disruption in movement
of trucks has also led to finished goods not being
moved. All of these have led to drop in
production as well as increased cost of
production. Not just the production, even
research and development exercises are
getting impacted due to the ongoing lockdown.
Strategic acquisitions and transactions which
could have enabled technology transfer, increased
R&D and increased supply of essential medicine
have all come to a grinding halt as investors and
collaborators are re- looking into expected
commercial return.
certain category of transactions in the pharma
sector are held up due to lock down related
restrictions for some time and hence new foreign
direct investments and collaborations are
getting delayed. Also, poor cash flow is troubling
the industry.
There are cash flow issues owing to reduction
in sale,delay in realisation from domestic and
export sale, and constraints in operating business
in the present lockdown.
Pharmaceutical industry highlighted that they will
be able to get back to 100 percent manufacturing
capacities only if states and Centre assist them to
get back labourers, help in smooth logistics for
supply of raw materials and finished goods.
Industry shared that some states are yet to allow
them to move back workers to the factories.
The COVID 19 outbreak has also presented
Indian pharmaceutical companies an
opportunity to become a preferred alternate
hub for manufacturing APIs and intermediates.
The Indian government recently undertook
applaudable steps , basically to reduce the
dependency of the pharmaceutical industry as a
whole on the heavily impacted Chinese market ,
by proposing an incentive package of 3,000
Crores for the promotion of domestic
manufacturing of critical key starting
materials, drug intermediates, APIs and
medical devices.
Having said that, both the government and the
industry are confident that soon pharmaceutical
industry will be able to get back to 100 percent
capacity utilisation, as both are working towards
easing the existing constraints.