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Drug manufacturers sound SOS, warn of COVID-19 drug shortage as raw material prices rise 200%

The Indian Drug Manufacturers’ Association (IDMA) has sounded an alarm regarding the price of raw materials used to manufacture key COVID-19 drugs

Drug manufacturers sound SOS, warn of COVID-19 drug shortage as raw material prices rise 200%
Drug manufacturers sound SOS, warn of COVID-19 drug shortage as raw material prices rise 200%
  • The association has claimed that the prices of raw materials used for manufacturing COVID drugs has jumped by 200 percent in the last one month

  • This could cause a shortage of key medicines used in COVID-19 treatment in the coming months, said the IDMA

New Delhi: In the backdrop of the steepest surge in COVID-19 infections in India since the pandemic broke out last year, the Indian Drug Manufacturers’ Association (IDMA) has sounded an alarm regarding the price of raw materials used to manufacture key COVID-19 drugs. According to a report published by The Print, in a letter dated April 29 addressed to Minister of External Affairs Dr S Jaishankar, the association has claimed that the prices of raw materials used for manufacturing COVID drugs has jumped by 200 percent in the last one month and there could be a shortage of key medicines in the coming months due to the price rise and unavailability of raw materials in the market.

One of the major issues that has precipitated a rise in prices of raw materials is the suspension of Chinese cargo services to India, which will have a direct bearing on the import of pharmaceutical raw materials. India imports 70 percent of pharmaceutical raw materials required by it from China. 

China’s decision to suspend cargo services to India has led to hoarding

According to the report, industry insiders have claimed that China’s decision to suspend for 15 days cargo flights by Sichuan Airlines that had been transporting medical supplies to India has led to hoarding of important pharmaceutical raw materials. “Traders and manufacturers of these raw materials are quoting different prices, sometimes within a span of four hours. The situation is very bad. If there is no intervention [from the government], there is a high probability of shortages of medicines in the coming months,” Sandeep Arora, chief executive officer of the Baddi-based, Ultra Drugs, was quoted as saying.

A senior official at one of the country’s leading pharmaceutical companies said that the “pricing situation is very bad. Prices have increased drastically and availability (of raw materials) is also a big issue.” The official added that if raw materials were not available or were expensive, drug-makers will stop the production, which will lead to a shortage of critical medicines in the future. “The situation in very alarming,” he noted.

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In the April 29 letter to Jaishankar, the IDMA too flagged the issue, terming China’s move as “worrisome” and expressing concern that it would have “cascading effects on its entire supply chain leading to shortage of essential medicines for the nation’s population as well as severe impact on exports.” The concerns about an “unprecedented” increase in prices of raw materials used for making COVID-19 drugs were also conveyed to the government by the IDMA in a presentation on April 5, said The Print.

‘India staring at huge shortage of vital COVID-19 drugs in June & July’

Ultra Drugs’ Arora said that with China suspending cargoes to India, there is going to be a huge shortage of vital COVID-19 drugs, especially in June and July. “Even simple products such as azithromycin, paracetamol, and montelukast [needed for manufacturing medicines] might be in short supply,” he added. According to the report, the prices of many active pharmaceutical ingredients (APIs), such as ivermectin, methylprednisolone, doxycycline, enoxaparin, paracetamol, azithromycin, meropenem and pipratazo, required for the manufacture of key COVID-19 drugs, have gone up by approximately 30-200 percent in the past one month, between March to April.

What has caused the price surge?

According to industry leaders, the main reason behind the surge in prices of pharmaceutical raw materials is a huge demand for drugs in the wake of a steep rise in COVID-19 infections, followed by anticipated shortage of raw materials due to the suspension of cargo services by China. “The news of cargoes to India being suspended by China led to the stocking up of raw materials and escalation of prices. In fact, artificial shortages were created by some traders,” said Arora. 

An executive at a pharma company based in Mumbai said that another reason behind the price surge is a reduced supply of oxygen required for the manufacturing of these drugs. In the backdrop of an acute shortage of oxygen for the treatment of COVID-19 patients, there is a shortage of oxygen needed in manufacturing APIs. “The other problem is that none of the manufacturing plants are working on full manpower capacity, because either the employees or their family members are infected with Covid,” he added. 

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