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    India Report

    Oral Solids Makers Face Corona Heat

    CDMOs fear supply disruptions, price increases.

    Oral Solids Makers Face Corona Heat
    S. Harachand, Contributing Editor03.04.20
    The lockdown of Chinese industrial hubs following the emergent Covid-19 has cast a shadow over the outsourcing sector, especially on the CMOs/CDMOs dealing with solid dosage manufacturing business in India.

    As a well-known trading point for chemicals, China offers a large variety of raw materials used in the production of pharmaceuticals. Indian manufacturers regularly source APIs, intermediates and other key starting materials for their formulations from Chinese companies. With the outbreak of the viral contagion, the cargo movements in some of the cities have come to standstill jeopardizing the global supply chain.

    The situation may prove to be a double whammy to oral solid makers as many of them often procure the excipients, as well, to make finished formulations from companies in China, apart from APIs and intermediates.

    The Indian pharmaceutical manufacturing industry is being hit by an anticipated short supply of certain crucial raw materials required to produce some essential medicines. The industry, which is heavily reliant on the Chinese imports as its domestic supply of raw materials are grossly inadequate to cater to the huge internal demand, has urged the government for intervention.

    Estimates show that in the foregone financial year, India imported APIs and intermediates worth $2.4 billion from China, constituting up to 68% of the total imports. The scenario could become worse if the trade impasse continues. The Indian Pharmaceutical Alliance (IPA), the industry body representing the largest companies, has made an alert recently that the API inventories currently remaining with its member companies can last only up to two to three months.

    The unpredictability of the situation in China could lead to a crisis, IPA warned. Prices of some of the essential medicines have already shot up.

    The Confederation of Indian Industry (CII) in a report  titled, “Novel Coronavirus in China: An Impact Analysis,” has also observed the supply chain disruption caused by the lockdown placed in four provinces and around 50 cities of China has “significant ramifications for Indian industry.”

    Indian pharmaceutical companies are now running close to exhausting their supply of APIs and are considering sourcing them from other countries, the report revealed.

    Government, on the other hand, is moving to some extreme measures like banning the exports of select APIs and formulations as a step to ensure that there is no shortage of essential medicines.
    Solid dosage CMOs do share the industry fear that the supply chain disruptions can jack up the prices of intermediates and other raw materials.

    There is worry that if the coronavirus outbreak continues for long, there will be a shortage of APIs and therefore drugs, said Kiran Mazumdar Shaw, chairman and managing director of Biocon, recently.
    There may be an increase in drug prices but not alarmingly so. According to Shaw, about 39 life-saving drugs have been identified where there is high reliance on China.

    Biocon’s oral solid dosage (OSD) manufacturing facility in Bangalore recently completed pre-approval inspections by the U.S. FDA with zero observations, the company informed.

    It is not necessarily the case that every manufacturer is directly reliant on Chinese goods. But the complex nature of the global supply chain makes them more vulnerable to be impacted by the unsettled trade situation in the wake of the coronavirus outbreak.

    Many of the raw materials including the APIs, even if they are purchased from India, may have their intermediate products or starting materials originated from China. A Chinese connection, therefore, cannot be ruled out in many of the materials irrespective of their source point.

    OSDs continue to play a major role for contract manufacturing, in spite of significant growth of the biologics drugs market in the last decade. They are the most commonly used method of drug delivery. Patients continue to prefer OSDs because they are more familiar with this traditional and a convenient method, which promotes compliance and a better overall patient experience, studies show.

    More than three-quarters of companies outsource solid dosage forms for clinical-scale manufacturing. This is followed by semi-solids and liquids. For commercial-scale manufacturing, nearly two-thirds of companies are seeking services for solid dosage forms, according to a survey conducted by Nice Insight. Fixed-dose combinations, controlled-release dosage forms and other lifecycle management strategies will continue to have significance among oral solids.

    Reports forecast that the OSD contract manufacturing market to grow at a CAGR of 5.8 percent in the coming years. Tablets will remain the most preferred, while immediate release and controlled release will grow.


    S. Harachand
    Contributing Editor

    S. Harachand is a pharmaceutical journalist based in Mumbai. He can be reached at harachand@gmail.com.
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