Fear of unstable Indian API supply spreads with COVID-19

COVID-19 outbreak: Indian government restricts export of 26 APIs

A third biggest exporter of API to Korea, India to impact Korean pharmaceutical company

Prolonged export issue from China and India could hinder manufacturing in Korea

Due to the outbreak of 2019 novel coronavirus (COVID-19), Indian government started limiting the export of active pharmaceutical ingredient.

 

Pharmaceutical companies’ concern of supply shortage is now imminent as COVID-19 could impede pharmaceutical ingredient export from China and India in a long-term.

 

According to industry sources on Mar.

 

4, the Indian government has decided to restrict the export of 26 active pharmaceutical ingredients (API) as of Mar.

 

3 (local time), because pharmaceutical shortage they are experiencing with COVID-19.

 

The restricted export list includes pain reliever acetaminophen (paracetamol), vitamin and antibiotics.

 

Indian companies would have to receive the government’s approval to export the APIs.

 

Almost 10 percent of APIs exported from India is on the restricted list.

 

India means to limit the pharmaceutical export before the country is faced with pharmaceutical shortage from COVID-19 outbreak.

 

As most of APIs manufactured in India use chemical substance imported from China, the API manufacturing in India would be affected if China were to struggle exporting the substance due to the outbreak.

 

Restriction on Indian-made API export could affect Korean pharmaceutical industry.

 

API and finished product import volume by year (Unite: USD 1,000) Source: MFDS

Korea’s Ministry of Food and Drug Safety (MFDS) said the total import volume of Indian-made pharmaceuticals reached USD 204.13 million in 2018, making it the tenth biggest pharmaceutical exporter to Korea.

 

Although the Indian-made finished product takes up only five percent of overall pharmaceutical market in Korea, the export restriction would still affect Korea as most of the imported products are API used by Korean companies.

 

In 2018, total of 195.59 million dollars of Indian-made APIs was imported, following the top export volume from China and Japan.

 

The Indian API import volume has been constantly increasing over the years.

 

The figure surged by 39.3 percent in seven years, starting from 140.43 million won in 2011.

 

The API import volume from India was at sixth place in 2011, following Japan, China, Italy, Germany and France, but the Korean pharmaceutical industry’s dependency on India has not ceased to grow.

 

Top API exporting countries to Korea by year (Unit: USD 1,000) Source: MFDS

Along with Chinese-made APIs, Indian-made imported API volume has gone up the most, mostly because of the low cost.

 

Experts assess Korean pharmaceutical companies have been increasingly preferring APIs from China and India to reduce production cost.

 

Some point out the Korean companies’ demands for inexpensive APIs have soared as the Korean government continuously lowered pricing of finished products and did not sufficiently compensated for their value, while their sales marketing activities have been strained with tightened regulation against illegal rebate.

 

But also, the enhanced quality of Chinese and Indian-made APIs has influenced the companies’ preference.

 

Pharmaceutical companies are now calculating the impact of Indian API export restriction.

 

The companies fear of the direct impact on pharmaceutical manufacturing caused by Indian-made API supply issues, as COVID-19 outbreak has already affected API supply from China.

 

The Korean companies are already struggling with Chinese API supply of stomach ulcer treatment cimetidine.

 

Chongqing Qingyang Pharmaceutical, based in Chongching City, China, has temporarily stopped manufacturing cimetidine API due to the outbreak.

 

As the outbreak is relentlessly spreading, the industry has to prepare for the actual API shortage of some herbal medicinal product ingredients solely depended on China.

 

As a result, pharmaceutical companies would have to seek for other API manufacturing sites to substitute Chinese or Indian-made APIs.

 

Apparently, most of APIs from China and India could be alternatively sourced from either Korea or other countries.

 

However, registering new API is not as easy.

 

MFDS has to approve of the use of currently unregistered imported API, but the ministry has suspended all overseas on-site inspection.

 

Also the companies are worried about increase in production cost by changing the API source.

 

A pharmaceutical company insider complained, “Majority of APIs imported from China and India are substitutable.

 

Although we could use reserved stock of APIs for a while, prolonged COVID-19 outbreak would inevitably cause problem in manufacturing schedule of drug products.”