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API industry hit by shipments docked in ports; concerned about payments made to consignments without quality tests
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Nandita Vijay, Bengaluru
July 01 , 2020
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The active pharmaceutical ingredient (API) industry is apprehensive about the future, as the sector, among other issues, is facing the challenge of delayed import shipments of KSM (key starting material) and other raw materials docked at the Indian ports.
There has practically been no activity in April because of logistical issues related to inter-state transport of raw materials and finished goods. Though the government was proactive in resolving these issues, unfortunately we are facing another challenge related to supplies, which has forced the manufacturing plants to work at a mere 50 per cent of the production capacity. Though the ports are now open, shipments from China are docked there for the last four weeks, stated Manoj Palrecha, managing director, Lake Chemicals and joint secretary, Karnataka Drugs and Pharmaceutical Manufacturers Association.
Although the usual practice is to analyse the consignments to check if they meet the required quality parameters after they reach India, we have not been able to test them since they are held up at the ports despite making all the payments in full including customs and GST duties. Furthermore, we may face difficulties in claiming refunds in case there are quality issues with the consignment because of delays in analyzing these goods, Palrecha told Pharmabiz.
Another issue is that some of the medicines being currently used in treatment of critically ill COVID-19 patients rely on Chinese KSM supplies. With the shipment of these raw materials delayed indefinitely, the shortages of these drugs might exacerbate the crisis. “We hope that the government will act in a time-bound manner and not allow the pharmaceutical industry to suffer which is already under the umbrella of essential services. This kind of delays is creating unexpected hurdles for the API manufacturers,” he said.
“We acknowledge that the government has the right intention to promote manufacturing of intermediates within the country in a bid to reduce the dependence on China. It has called for the pharma industry to go for backward integration. Though the industry supports this initiative, it will need to be implemented in a streamlined and well-structured, time-bound manner. Sudden stoppage of supplies of these key products is not going to help the industry, instead it may lead to shortage of essential drug supplies,” pointed out Palrecha.
Yet another challenge for MSMEs operating on state borders is the difficulties their employees face in commuting every day. For instance, at industrial estates like Attibele and Bommasandra among others located on the periphery of the Tamil Nadu and Karnataka borders, the employees have not been able to travel easily. Here the government needs to solve the problems of the factory workforce to help them travel without hassles as there is not much clarity on the system to be followed currently.
Now with the number of COVID-19 cases on the rise, Tamil Nadu is already under a lockdown. The governments of Tamil Nadu and Karnataka need to put in place a mechanism to allow workers to commute to work so that the pharmaceutical industry which is crucial in this war against COVID-19 is able to perform as per the expectations, said Palrecha.
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