India needs holistic ecosystem to rebuild API manufacturing capacity: PwC

India needs a holistic and conducive ecosystem to rebuild its active pharmaceuticalingredient (API) manufacturing capabilities, as high dependenceon a single source can be a cause of concern in emergency-like situations, PwC India said on Thursday.

Dependence on China for APIs has been an ongoing concern for the Indian pharma industry. Around 50 per cent of the critical APIs are being imported and almost all the imports are from China, a study by PwC India noted.

The Chinese API industry has an inherent advantage because of economies of scale and support from the Chinese government in the form of financial incentives, infrastructure and regulatory policies, it added.

High dependence on a single source can have a significant adverse impact in emergency-like situations, the study 'Reviving India's API industry' said.

A favourable financial and regulatory ecosystem and policies are likely to enable the API industry to ensure health security in India by making it self-reliant, it added.

The study recommended that to revive the API industry, in the immediateterm there is a need for faster environment clearance, encouraging manufacturing of key APIs/intermediates and fermentation products by providing a fiscal stimulus, accommodative pricing policy under the Drug Price Control Order, 2013 and financial incentives.

For the long term, the government may look at the Chinese model and work on developing clusters for API and fermentation, along with looking at ways to encourage alternative sources,it added.

There is also a need for the industryacademia initiatives to improve process technologies, the study recommended.

"High dependence on a single source can have a significant adverse impact in emergency situations like COVID-19. With recent changes in API's prices rising up to 100 per cent, it is time we revive our domestic API industry,"PwC IndiaPartner and LeaderHealth IndustriesSujay Shetty said.

While some policy changes may take time, "we need to collectively evaluate and strategize for ways to encourage alternative sources," he added.