There has been a sharp increase in the cost of raw materials for essential drugs, also known as active pharmaceutical ingredients (API), by 139% in certain cases, compared to the pre-pandemic level. 

The overall spike, at an average of around 50% due to the costly imports and supply disturbances from China, has led to concern over the availability of drugs and could eventually result in shortages, especially of the products that are crucial in treatment of COVID.

The prices for API of some drugs, such as paracetamol and the antibiotic meropenem, or the anti-diabetic drug metformin, have increased over two-fold to 139%, 127% and 124% respectively. India imports close to 70% of the APIs from China. At the same time, our dependence for some of the life-saving antibiotics such ascephalosporins, azithromycin and penicillin is around 90%.

These medications are subjected to price control, therefore, companies have to bear the higher cost, raising concerns over their survival. If this continues, some of the medicines might disappear from retail shelves as the companies may switch to products where margins are protected. Due to shortages, patients may have to face the consequences and opt for highly priced alternatives.

A GSK Pharma executive said that API prices for some of their products had witnessed a steep rise during the year and because they have long-term contracts for paracetamol tablets, the percentage increase has been as high as 75%, and for paracetamol suspension, it has been 115% over the past year. 

Packaging and freight costs have seen a rise. Indian Drug Manufacturers’ Association ED Ashok Madan stated that a huge rise has been seen in freight, transportation and packaging costs.

Source: ET Healthworld