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Chinese drugs pose threat to Indian pharma

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from China may soon post a threat to the Rs 20,000 crore domestic bulk drug industry.
 
Indian companies are finding it impossible to arrest the trend as the imported drugs are of the same quality and brought in through legal channels.
 
Ind-Swift Laboratories, a pharmaceutical major based in Chandigarh, halted the production of roxycomycin and arithromycin last month.
 
"While our manufacturing cost comes to $115 per tonne, the Chinese supply the same drug at $105 a tonne. Since we could not match their rates, we discontinued the production, which stood at 1.5-2 tonnes a month," said V K Mehta, joint managing director, Ind-Swift.
 
It is not Ind-Swift alone. Companies like Alembic, Kopran and Torrent are all bearing the brunt of Chinese imports. The consequences are severe on firms producing bulk drugs like azithromicin, clarithromycin, ciprofloxacin, norfloxacin, roxycomycin, cephalosporins and anti-quinolones. As a result, the pharma industry is losing business worth Rs 2,500 crore a year.
 
"Pharmaceutical units making conventional bulk drugs like paracetamol and analgin have stopped production. These include firms like Shasun, Saraca and Siris. In addition to being low-cost, the credit facility (4-6 months) given by traders handling Chinese products is also making competition impossible," a spokesperson for the said.
 
Over 35 per cent of the products manufactured by Indian bulk drug small-scale units are available from China at a much lower price (less than the cost of raw material borne by Indian firms).
 
In fact, some pharma units, which had stopped production, are now importing Chinese drugs for marketing them in India. Pharmchem, a Delhi-based manufacturer, has started trading in Chinese bulk drugs.
 
Big names in the Indian pharma sector are not unaffected, either. Ranbaxy is planning to reduce the production of some of its bulk drugs. Cipla is known to be using Chinese bulk drugs for its formulations.
 
Regent Drugs, the Indian arm of the world's biggest generic company, Teva, is finding it hard to beat Chinese bulk drugs. The company says its production costs are higher than the prices of imported Chinese medicines.
 
SPIC India, Torrent and Alembic had, in the recent past, shut down their penicillin bulk manufacturing units after failing to withstand Chinese competition. The industry fears bulk drug producers handling more therapeutic categories, may meet the same fate if the current trend continues.

 
 

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