News Feature | April 16, 2014

Domestic Prices Of Bulk Drugs From India Likely To Increase This Year

By Marcus Johnson

The growth of bulk drugs exported from India has slowed in recent months, due to regulatory questions from the U.S. and the EU. However, the price of bulk drugs is expected to increase in India this year. Because of inflation and freedom from price controls, industry experts believe that the price of active pharmaceutical ingredients( APIs) could increase as much as 5-15 percent this year. This slight rise in price is not completely unexpected however, because bulk drugs were freed from price control under the new Drug Price Control Order 2013, Business Standard says.

The bulk drug industry has stated that while price increases are expected, competition inside of India from various drug companies as well as Chinese imports should keep costs manageable. "However, in the wake of stiff competition from China, Indian makers have to be cautious. In the case of very high prices formulators would go to Chinese counterparts,” said Anand Khullar, who works as the resident director of the Bulk Drug Manufacturers Association.

Ranjit Kapadia, a pharmaceutical analyst working for Centrum Broking, felt that the increase in cost would be no more than 15 percent. He also added that although Chinese competitors will keep costs low, they are often producing APIs that Indian companies do not. “Chinese companies have an edge over Indian API manufacturers due to the economy of scale and incentives from the Chinese government. Many of the Indian API players have moved to high-end niche products where competition is limited and margins are high. Most of the commodity APIs are imported from China,” said Kapadia.