The drugs affected by the cost increases include Penicillin, one of the oldest-known antibiotics, which its raw material becoming 40 per cent dearer in just one month — reports of a possible outbreak first reached the World Health Organization on 31 December.
According to data from the Pharmaceutical Export Promotion Council (Pharmexcil), which functions under the Ministry of Commerce and Industry, the cost of active pharmaceutical ingredient (API) Penicillin has increased to Rs 639 ($9) per unit against Rs 454 ($6.4) per unit in January.
APIs, or bulk drugs, are the raw materials required for the manufacture of medicines.
Data collated by API manufacturers further suggests a rise of 13-18 per cent in the prices of APIs for other antibiotics — Azithromycin, Doxycycline, Amikacin, Amoxicillin, Ornidazole and Dexamethasone Sodium etc.
Meanwhile, the price of Paracetamol, an API for painkillers such as Crocin, has increased by 26 per cent to Rs 330 per unit from Rs 262 in January. However, none of these price increases is likely to affect consumers since pharmaceutical companies are not allowed to push up prices of key drugs by more than 10 per cent per year.
Battling the coronavirus outbreak
Indian drugmakers import around 70 per cent of APIs from China. However, the country, battling a coronavirus outbreak that is still claiming lives, put businesses on lockdown to contain infection.
The coronavirus outbreak has until now caused over 1,300 deaths in China, with one death each reported in Japan and the Philippines.
According to a CNN report, health authorities in Hubei, the epicentre of the outbreak, “announced an additional 242 deaths and 14,840 cases of the virus… as of Thursday morning, the largest single-day rise since the epidemic began”.
The lockdown was eased this month and “most businesses” were reportedly allowed to resume work amid severe checks.
But industry watchers expect a shortage of raw material to kick in if the situation in China doesn’t “improve” in two-three weeks.
“On account of coronavirus disruption in China, the Indian drug industry is suffering from supply gaps,” said Pharmexcil chairman Dinesh Dua.
“China continues to remain partially locked down… There is a huge surge in demand of key starting material, APIs and other intermediates, leading to 20-40 per cent increase in prices,” Dua added. “The situation in China must improve in the next 2 to 3 weeks to avoid shortages.”
‘Hoarding has begun’
B.R. Sikri, president of lobbyist body Federation of Pharmaceutical Entrepreneurs (FOPE), said the prices of APIs are going up constantly due to delay in the opening of the Chinese market.
“Indian traders have started hoarding the products and, also, freight charges (from China) have increased of late. Hence, new products will even be costlier,” he added.
The cost of importing APIs from China by the water route has increased by over 90 per cent — it was approximately $1,350 (Rs 96,000) per container in February against $700 (approximately Rs 50,000) in December.
“Similarly, the cost-per-kilogram for importing APIs through air has doubled from $2 [Rs 142] to $4 [Rs 285],” said an industry expert.