Indian Drug Makers Embrace 'Go Local' Mantra For APIs As They Seek To Reduce Dependence On China For Raw Materials

In a bid to reduce dependence on China for the Active Pharmaceutical Ingredients (APIs), the chemical compounds used to make medicines, the Indian drug makers are now trying to either make them in-house or source them from reliable local manufacturers.

India is known as the pharmacy of world for its huge production capacities for both generic drugs and vaccines. The Indian drug makers, however, have to rely for supply of raw materials on China, which accounted for half of India's API needs in 2019, reports Economic Times.

However, after the deadly clash between Indian and Chinese troops in eastern Ladakh last year along with disruption to supplies form China due to the Covid pandemic, the leading Indian drug makers including Cipla, Cadila Healthcare and Sun Pharmaceutica have started to aggressively work on reducing their dependence on China for raw materials.

"Because of the anti-China sentiment ... most of the companies are working towards de-risking themselves in terms of making it clear that their supply chain linkages with China are limited," Gaurav Suchak, supply head of Cadila, was quoted as saying in the BioAsia conference.

"For the critical API molecules, the idea is to go for a backward integration where you are in control of that pie which is going to make the most impact on your business, and also to make sure that the entire value chain is secure," Suchak added.

He further added that firms are also looking for reliable local vendors that can promise consistency and competitive prices.

Meanwhile, Cipla has launched an "API re-imagination" programme to possibly expand its manufacturing capabilities to avail incentives under governemnt's PLI scheme for the sector. The company is also working with local suppliers for its API needs.