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Pharma MSMEs in rough weather due to rising input costs; prices of paracetamol tripled in 12 months

Peethaambaran Kunnathoor, Chennai
Tuesday, December 21, 2021, 08:00 Hrs  [IST]

A tailor-made support by government for existence has become inevitable for the struggling pharma MSME sector in the country today on account of the rising input costs and the continuous increase in the cost of production which have led most of the micro, small and medium scale manufacturing units to sail through rough weather.
 
“In a serious situation like this, it is the responsibility of the ruling government to support the industry and ensure availability of all life-saving drugs for the use of the general public at all times. When we consider the challenges that the pharma SMEs face today, we must say that the constant availability of drugs at affordable prices has to be maintained at any cost and it should not be jeopardized”, says the pharma industry analyst Vivek Padgaonkar, former director of sales and marketing division of the GSK.
 
The Indian pharma sector, especially the manufacturing units under the SME and the MSME sectors, has now faced unprecedented circumstances causing disruptions to their growth. There has been a steep rise in the cost of raw materials in the last three years and it is still pinching the industry hard, but the ceiling prices (CP) of the controlled formulations remain the same or not being revised. The total cost of production has tripled in three years with escalation in the cost of APIs, raw-materials and packing materials besides the increase in the transportation cost due to rise in fuel prices. This has become critical for the entire unit to withstand and leads the industry to a situation of business unworkability for sustainable production and marketing of formulations, mainly with paracetamol, the essential antipyretic, and its combinations.
 
In a telephonic chat with Pharmabiz, Padgaonkar who was previously the director (policy and project) of OPPI, a body of large pharma players in the country, said a huge disparity is visible in the increase in the prices of paracetamol APIs and the corresponding increase in the ceiling prices of its formulations from 2018 to till date. Quoting market data, he said prices of paracetamol APIs have tripled in the last 12 months period. The price of one kilogram of paracetamol API was only Rs. 351.50 in August 2020, but it has increased to almost Rs 950 in October 2021. Meanwhile the MRP of the formulations has not increased correspondingly as paracetamol is a controlled drug.

 
As far as the MSME manufacturers are concerned, it is not viable for them to continue the production of the essential formulation, paracetamol, and maintain its availability in the market unless their ceiling prices are increased. 
 
The industry analyst from Mumbai said, since the inception of the DPCO 2013, paracetamol has been put under price control. Its ceiling price was increased only by 3% for the 125 mg syrup, and decreased by 3.19 % for the 500 mg tablet strengths. However, in the same period, the price of the API of paracetamol has increased more than three times. If it is carefully analysed it can be seen that the API price has doubled only in last one year. The reason cited for the increase of the API for the paracetamol drug is that there was increase in the prices of the key starting materials (KSMs), para amino phenol (PAP) and acetic anhydride, to manufacture paracetamol drug. The KSMs are imported from China. Acetic anhydride is manufactured from acetic acid, and the price of which has increased from Rs. 51 per kg to Rs. 116 per kg now.
 
He said PAP is under huge short supply in almost all the factories in China where most of the manufacturing companies of this intermediate are closed now due to shortage of power. All the plants in China are operating only twice in a week because of restricted power supply. He said the situation is likely to be aggravated in the ensuing winter season and in the scheduled Olympic games in February next year.

When asked about the usage of paracetamol API, Vivek Padgaonkar said only 20% of the paracetamol is used for single formulation and 80% is used for various FDCs such as ibuprofen & paracetamol.

 

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Naqibullah Jan 14, 2022 6:49 PM
we need the API price for 12 months have increased in India Market
 
 
 
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