Chinese imports hit bulk drug makers

Rupali Mukherjee / TNN / Jan 4, 2006, 03:27 IST

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Cheaper bulk drug imports from China are crippling domestic industry, and in some cases even threatening the closure of local manufacturing facilities.

NEW DELHI: The Dragon is spitting fire again. Cheaper bulk drug imports from China are crippling domestic industry, and in some cases even threatening the closure of local manufacturing facilities.
Manufacturers of Doxycycline, Oxy-tetracycline, Norflox, Penicillin-G have been affected due to "cost-feasible Chinese imports, as well as certain regulatory policies." These include leading drug companies such as Pfizer, Nicholas Piramal, Alembic, and Torrent.
What has made matters worse are certain government policies including price control on drugs, which has made these imports more attractive, and consequently, cost-feasible for the industry.
Stringent price control has forced domestic companies to look for alternative sources of bulk drugs supplies from China, industry sources said. Companies find it cost effective to import bulk drugs and formulations, rather than manufacture these locally.

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Pfizer is importing tetracycline from China, KG Ananthakrishnan, senior director, Pfizer said, adding that these imports meet the requirements of cost and quality.
The company had to close down Chandigarh facility, manufacturing Oxytetracycline, mainly due to cheaper and cost-effective imports.
Nicholas Piramal, for example, is reducing the production of Vitamin A as it is unviable to sell it at the price fixed by the government, sources said. Prices of 74 drugs are fixed and revised by the National Pharmaceutical Pricing Authority.

Alembic is also facing the heat from China, which manufactures Erythromycin at its facility in Baroda.
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This is because recently the government has discontinued dual pricing, and instead fixed a single price for both categories of manufacturers those who manufacture from basic stage (Alembic) and those who import the intermediate.
Manufacturers who import the intermediate Erythromycin thiocyanate (TIOC) to manufacture the drug are at an advantage.
"We may be forced to close the plant as it is now unviable," a top Alembic official told TOI.

About the Author

Rupali Mukherjee

A business journalist with around two decades of experience tracking key consumer-focussed sectors like consumer durables, retail, consumer goods, aviation, automobiles and advertising, as well as economic ministries of the Union government. Now, writes primarily on pharmaceuticals and healthcare, and on issues of consumer interest. Besides also looks at trends that are shaping consumer behaviour and the broad consumer landscape. \nYou can follow Rupali on Twitter@Rupalijee.

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