Bulk drug makers to benefit from price stability but need to improve efficiency to compete with Chinese rivals: Experts

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Subscribe to enjoy similar stories. Mumbai: Softening prices of active pharmaceutical ingredients (API) are likely to stabilise in the months ahead and bring relief to Indian manufacturers, but they will still have to improve their operational efficiency to compete against Chinese rivals, industry executives and analysts said. API prices have been falling for the past 12-15 months, driven mainly by sharp price cuts by Chinese companies, which is impacting the bottom line of Indian API companies.

APIs are the chemical compounds in medicines that produce the desired effect in treating a condition. “You are in a commodity business. So, you have to constantly improve the prices," Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance, told Mint, adding that API prices are not likely to go up.

“It is important that constant efforts are taken by API companies to contain the cost and improve their operational efficiency." “Now, it's come to a stage where if you cut [prices] further, you will not be making money… then there should be some stability," said Prashant Nair, lead analyst for pharma and healthcare at Ambit Capital. India is trying to become self-sufficient in API manufacturing and reduce its reliance on the import of critical bulk drugs after restrictions during covid-19 made the country vulnerable to supply and price risks. With this objective, the government launched a production-linked incentive scheme to encourage the domestic manufacture of 41 bulk drugs from FY21 to FY30.