Hyderabad, Aug 27 (KNN) The steep 50 per cent hike in cost of Active Pharmaceutical Ingredients (APIs) imported from China is pinching the industry hard raising doubts on the availability of drugs and could lead to shortages, particularly of those that are key in COVID therapy, said a report by Infomerics Valuation and Rating Pvt Ltd.

According to the Trends and Prospects report released by Infomerics on Thursday, stated that while nearly 70 per cent of the country’s APIs are imported from China, the dependence rises to 90 per cent for certain life-saving antibiotics like cephalosporins, azithromycin and penicillin.

''Since these medicines are under price control, companies are forced to absorb the higher cost, raising questions about their viability. In this scenario, over time, certain medicines could disappear from retail shelves,'' the report said.

The also revealed that despite being wrecked by COVID, the pharma industry grew 37 per cent year-on-year and 15 per cent sequentially in Q1FY22.The growth was driven by sales of COVID treatment drugs and other drugs.

“The cost of manufacturing in India is approximately 33 per cent lower than that of the US. Therefore, the industry can benefit from these attributes and accordingly scale up production, productivity and efficiency. But the realization of this potential necessitates harnessing economies of scale to move to a newer and higher orbit,” it added.

The report highlights some catalytic initiatives of the government including the Production Linked Incentive (PLI) scheme for the promotion of domestic manufacturing of critical key starting materials (KSMs)/and Drug Intermediates and APIs, andthe JanaushadhiPariyojanato make available quality medicines consumables and surgical items at affordable prices for all and reduce out of pocket expenditure of consumers/patients.

The report also noted the wide-ranging ramifications of the liberalised Foreign Direct Investment (FDI) with 74 per cent FDI under automatic route in brownfield pharmaceuticals, PLI scheme, which augur well for the steady growth of the industry.