IN 2018

The National Pharmaceutical Pricing Authority (NPPA) Indian Government agency had capped heparin’s (blood thinner Medicine) ceiling price sometime in 2018. However, there have been instances of shortage of this Medicine during the Covid-19 pandemic, according to the Medicine pricing regulator.

Why? The cost of API has increased drastically

according to pharma companies. Active Pharmaceutical Ingredient are crucial elements in drug production as they give medicines their therapeutic effect.

HOW MUCH INCREASE IN PRICE OF API?

From September 2018, the price of this Active Pharmaceutical Ingredient has shot up 211 %.
With the maximum price that companies can charge for the medicine fixed, but the Active Pharmaceutical Ingredient costs rising, they claimed it had become unviable to continue manufacturing and selling the medicine in India. Therefore, the shortage in the market.

NPPA ALLOWS HIKE IN PRICE

India’s drug pricing regulator has allowed pharmaceutical companies to increase the ceiling price of essential medicine heparin (blood thinner Medicine) by 50 % until December 31.
This may only be the first of several drugs to get a price hike as the nation tries to tackle the pandemic outbreak here as the countrywide lockdown and the ‘Mainland China’ factor takes its toll on India’s pharmaceutical industry.

WHAT POWERS DID NPPA USE TO INCREASE PRICE?

National Pharmaceutical Pricing Authority used extraordinary emergency powers provided to it under paragraph 19 of the Drugs (Prices Control) Order, 2013.
This provision allows for the regulator to, fix the ceiling or retail prices of any medicine regardless of whether they were under or eligible for price control under normal circumstances.
It also allows National Pharmaceutical Pricing Authority to increase or decrease their prices irrespective of the year wholesale price index of that year.

WHAT IS HEPARIN AND WHY IS IT ESSENTIAL?

Heparin (blood thinner Medicine) that has long been used in patients vulnerable to blood clots in their legs, lungs, heart or other parts of body. It is used to reduce their risk of heart attacks, strokes and pulmonary embolism. Several patients with critical illnesses, including those requiring kidney dialysis, are given the medicine.
During the pandemic, Health Ministry included the medicine in its clinical management guidelines for the treatment of Covid-19 patients in the Intensive Care Medicine.

WHAT ROLE DOES MAINLAND CHINA HAVE TO PLAY IN THE AVAILABILITY OF HEPARIN?

The heparin sodium Active Pharmaceutical Ingredient for the injections made in India majorly comes from Mainland China. Industry bodies say there are not many alternative manufacturers for the Active Pharmaceutical Ingredient, especially in India.

This is the case with several Active Pharmaceutical Ingredient used in India’s pharmaceutical industry.
The country heavily relies on Mainland China for various APIs used to make crucial antibiotics and vitamins. According to industry bodies, even the Active Pharmaceutical Ingredient and other key ingredients for popular painkiller paracetamol are imported from Mainland China
In the last 3-6 months, prices of APIs from the People’s Republic of China have gone up 20-35 %.

MOST APIs COME FROM WUHAN

This was around the time that Wuhan (City in China), from where these APIs were mostly imported, was under a Covid-19 lockdown.

IS THIS BECAUSE OF INDIA’S TENSIONS WITH CHINA?

According to one industry association, the spike in Active Pharmaceutical Ingredient costs during the covid-19 pandemic are also in part the aftermath of the lockdown in Wuhan, China.

China’s firms took a hit when they had to shut their factories temporarily or were facing difficulties in exporting their APIs during their nationwide lockdown. Some of the hikes in Active Pharmaceutical Ingredient costs are because of such firms trying to recover the costs they endured from this impact, said the association.

EXTENT OF INDIA’S DEPENDENCE ON CHINA

Of the over $3.5 billion (Rs 260674750000) worth of ingredients that Indian drug-makers imported to manufacture several essential medicines in 2018-19, Mainland China catered to around 68 %.
This means that a snag in the supply chain from Mainland China could disrupt the availability of medicines made in India.
It could also hit the availability of medicines in other nations that import from India as well.

China factor impact on Indian Pharma sector China factor impact on Indian Pharma sector