The Indian government has imposed a minimum import price on the key ingredients required in essential drugs. The action is to safeguard the Indian drug manufacturers from being versus the Pricing of Chinese manufacturers. The imposed ban will last until November 2026. it has been feared that this could lead to the rise in the price of medicines. A program was introduced to discourage dependence on China.
The Indian government has fixed a minimum import price for some of the key pharmaceutical inputs to check aggressive undercutting and dumping by Chinese manufacturers. The floor price restrictions were imposed by the government on the import of potassium clavulanate and on some intermediates used for the manufacturing of clavulanic acid and potassium clavulanate. Potassium clavulanate is used by the pharmaceutical industry in manufacturing drugs for treating bacterial infections.
As per a DGFT notification, the import price of diluted potassium clavulanate or its derivatives is pegged at $180 per KGA, while that of ATS-8 is pegged at $111 per kg. This is significant, given the fact that the latter is a key intermediary used for the production of atorvastatin calcium, which is one of the most commonly prescribed statins for the reduction of blood cholesterol.
The pricing restriction shall be valid until 30th November, 2026, as per the latest notification spotted by ET. Therefore, with effect from today, the import of these raw materials like bulk drugs or active pharmaceutical ingredients (APIs) shall not be allowed below the MIP. But, some experts from the pharma industry have raised concerns about the government’s decision to introduce the minimum import prices (MIP), claiming that due to this, the cost of production for active pharmaceutical ingredients (APIs) and formulations will escalate, and hence, the prices of medicines will increase for the citizens.
“This kind of decision regarding the fixing of the price of clavulanic acid will be counter-productive as the formulation companies were previously purchasing the same at $140 per kg. The decision has not been taken after considering ground realities,” said an industry official. “This is a last ditch effort to save the companies that have taken the benefit of the government’s PLI scheme. The concept of floor price can be implemented only when the entire home market is met by the domestic manufacturers and there is no requirement for imports,” said the official.
In November, an MIP of ₹1,174 per kg was notified for sulphadiazine to be effective till September 30 next year. In 2020, the government launched production-linked incentive scheme to attract investment in the production of critical raw material from the domestic players to make the country less dependent on China and bring price stability. However, the Chinese started cutting prices further thus putting at risk huge investments made by the PLI beneficiaries. Industry insiders say the invoking of MIP is clearly a protectionist tool to favor the PLI beneficiaries and beyond the scheme’s mandate.
