New Technical Committee for APIs

Syllabus subtopic: Issues Relating to Development and Management of Social Sector/Services relating to Health, Education, Human Resources.

Prelims and Mains focus: about the new committee and its functions; about COVID-19 outbreak and its implications; about API

News: The government has decided to set up a 10-member technical committee to revive India’s lost capacity to make certain crucial drug ingredients.

Significance of the move

The development holds significance as it comes in the backdrop of a steady escalation of Covid-19 cases in India as well as a continued shutdown of operations in a major Chinese province that exports these key ingredients to the country.

Background

• The development comes over a month after the Department of Pharmaceuticals (DoP) formed an expert committee to monitor the potential impact of the novel coronavirus outbreak in China on its supply of active pharmaceutical ingredients (APIs) to India.

• Around 58 such ingredients had been identified by the committee set up last month, including amoxicillin, vitamin C, neomycin, acyclovir and tetracycline. Exports of some of these ingredients, imported from China’s Hubei province that is currently under lockdown, have been restricted by the Directorate General of Foreign Trade (DGFT).

• The committee, chaired by CDSCO Joint Drug Controller, had recommended the formation of this technical committee, which is expected to suggest ways to revive India’s API segment, especially its fermentation-based APIs.

• The committee had also recommended that the government establish a “Drug Security Authority” to make India “self-sufficient” and a “global leader” in APIs and other key intermediates domestically as well as an exporter, according to a person aware of its recommendations.

What are APIs?

APIs are the key ingredients that give a drug its therapeutic effect.

Need for a technical committee

DoP has constituted the new technical committee because it was receiving varied estimates from industry members of how much more expensive it was to make these APIs in India as compared to China.

Mandate of the proposed technical committee

• Look into the cost of setting up fresh API manufacturing capacities — greenfield projects — to wean India off its dependency on imports for these products.

• Examine the latest “viable” technologies to make these products, “including backward integration”.

• Examine a proposal to restart manufacturing of some of these APIs by government undertaking Hindustan Antibiotics Limited (HAL).

• Look into other existing facilities along with their capacities to make these ingredients.

API manufacturing plants in India: Challenges

• Between the 1960s to 1980s, India had set up 7-8 manufacturing plants to make as many as 20 crucial fermentation-based ingredients, including penicillin G, erythromycin, citric acid and vitamin B12. However, in the last three decades, these manufacturing plans were shut down due to “cheaper” alternatives from China.

• This was because Chinese API manufacturers managed to scale up production with government support like cheaper land during that time. Their products became 20-25 per cent cheaper than domestic firms (even with import duties), making Indian API manufacturers less competitive.

• India relies on China for nearly 70 per cent of its total API imports, leaving the country in a vulnerable state during the current outbreak of the deadly respiratory coronavirus.

• According to DoP, the present stock of APIs may be sufficient for 2-3 months to make formulations.