Context:
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The recent tension between India and China has prompted the government here to think of measures to reduce its dependence on China for pharmaceutical products.
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The health ministry along with drug regulators is planning to take a series of measures to limit reliance on China as well as tighten the regulatory checks and balances to ensure only good quality supplies are entering the Indian market.
Key Points:
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Currently, India gets 70-80% of its medicines and medical devices supplies, including raw material for pharmaceuticals (Active Pharmaceutical Ingredient) from China. This poses a major risk of severe drug shortage if India’s diplomatic relations with China worsen.
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The landed price of API from China in India is 15-20% less than its production cost here, making it more viable for companies to import.
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In fact, in 2014, National Security Adviser Ajit Doval had also warned the government about India’s over-dependence on China for API and how tension between the two countries can cause a crisis in the public health system of India.
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Following Doval’s alert, the government had formed a committee of experts to formulate a specific policy to boost API manufacturing in India.
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India was once a favoured destination for sourcing low-cost, good quality raw material for manufacturing medicines. Gradually, China has taken over this bulk drug market globally in the past few years by creating huge capacities.