Drug shortage in India?

According to the Indian Drug Manufacturers Assoc., Olympics-related shutdowns of key raw materials suppliers in India are going to mean drug shortages in India in the next few months. Says DNA India:

India imports as much as 80% of its pharma raw material requirement, including APIs, from China because it is 10-40% cheaper, said Swati A Piramal, director, Piramal Healthcare.

Shinde says the shortage is not being felt today because medical stores are coping with pre-clampdown inventories.

“But after September, the shocks will be felt everywhere. The current stock will be consumed by then.

People will find it difficult to source drugs they would desperately want,” Shinde warns.

Domestic manufacturers are hurting, too, because shortage is spiking raw material prices and price control has become a bigger headwind.

“After the clampdown, prices of raw material have risen by 30-50%,” Piramal said. About 40-60% of the total costs of a pharma company is accounted for by raw material.

Indian manufacturers blame price controls in the country for driving them to outsource so much raw material manufacture in China, although it's hard to imagine why they wouldn't go to the cheapest source even absent the price controls.

Tapan Ray, director general of Organisation of Pharmaceutical Producers of India (OPPI), says companies have primarily been sourcing raw material from China because the low cost offsets the price control in India.