Shah TC, an Indian API marketing company, exhibits at the 19th Chemical Pharmaceutical Ingredient China Exhibition in Shanghai in June 2019. Photo: VCG

India's pharmaceutical industry, one of the world's major producers, may suffer a hit from the novel coronavirus epidemic in China including price hikes and a drug supply shortage, according to industry insiders. 

The prolonged manufacturing suspension in China has so far caused a price increase in all raw materials imported to India from China, Chairman of the New Delhi-based Confederation of Indian Pharmaceutical Industry (CIPI) P. K. Gupta told the Global Times, and the price surge in antibiotics has already reached customers. He is concerned that a potentially longer delay in shipments of active pharmaceutical ingredients (APIs) could heavily disrupt the supply of drugs in the Indian market.

"Presently, the prices of antibiotics have already been increased but are tolerable," Gupta said. "If [there is a] further hike in prices, then prices of formulations will definitely increase and the drugs may even be absent from the market."

B.R. Sikri, president of Indian lobby group for drugmakers the Federation of Pharmaceutical Entrepreneurs (FOPE), is also worried that shipments of APIs from China will be delayed and orders will not be dispatched on time, according to a report by theprint.in.

Such concerns have been confirmed by some API producers in China. A sales manager surnamed Cheng from Wuhan Shiji Pharmaceutical, located in the epidemic epicenter Central China's Hubei Province, told the Global Times that the province's API production has been suspended since the Spring Festival, and all international orders - about half of the company's total orders - have been suspended. 

The suspension of API production, which is in the upstream of the pharmaceutical industry, is weighing heavily on the downstream formulation of tablets, capsules and injections, Cheng said.

China is the world's biggest API exporter, according to China's Ministry of Commerce. Its exports accounted for 68 percent of all imports of APIs and drug intermediates in India in 2018-19, with a total worth of $2.4 billion, according to India's Directorate General of Commercial Intelligence and Statistics.

India's dependence on China's supply of APIs for antibiotics is particularly strong, with some key antibiotic drugs almost solely dependent on imports from China, according to media reports.

The over-dependence of India's pharmaceutical industry on Chinese exports reveals the fragility of its supply chain. Although some companies in Europe are also producing APIs, intermediates used in the production of certain antibiotics including Gentamicin Sulphate, a drug used to treat several types of bacterial infection, are currently only available in China, according to Gupta.

As the biggest supplier of generic medicines globally, India's disrupted supply chain could send shockwaves through the global industry, rather than just hurting the profitability of local pharmaceutical companies.

According to the India Brand Equity Foundation, India's exports of generic medicines account for 20 to 22 percent of the global export volume, and its biggest importers include the US, Russia and the UK - countries which could also feel the pain of a price surge and supply shortage.

The coronavirus will "no doubt" have the same impact on major import countries as is seen in India, Gupta said, as India's central government has already taken restrictive measures on exports to prevent medicine shortages or a further price surge.

India's government last week decided to restrict certain API and formulation exports originally imported from China due to the disrupted supply, according to a report by theprint.in. Restricted items include 12 drug ingredients - mainly antibiotics - including Azithromycin, Amoxicillin, Ofloxacin, hormone pills, and some common vitamins such as B12, B1, B6 and E.