India’s Pharmaceutical Industry Disruption Impacts Africa and the World

India is one of the top global pharmaceutical producing markets that a large share of the global healthcare systems relies on for supply of drug formulations and biologicals at least until COVID-19 pandemic struck.

The pandemic disrupted India’s pharmaceutical export supply chain with the Directorate General of Foreign Trade (DGFT) halting, albeit momentarily, the exportation of some pharmaceutical products that may have had an impact on provision of health services especially in low and middle income countries such as those in Africa. (1)

For example, in March 2020, India announced a total ban of hdyroxychloroquine and formulations from hydroxychloroquine except in circumstances where the export is in fulfilment of an earlier obligation under advance contract preceding the ban date or where an irrevocable letter of credit had been issued before the export ban notice.

The Indian government also restricted the hydroxychloroquine exports except in a situation where full advance payment had been received by Indian exporters or where the product was destined to other countries on humanitarian grounds but subject to recommendation of the Ministry of External Affairs.

The restrictions on exportation of hdyroxychloroquine and 24 other products was later eased under subsequent notices by DGFT.  (2)

Previously, India had placed export restrictions on at least 26 other products including paracetamol and several antibiotics. (3)

The ban was largely to mitigate an unprecedented disruption in production of APIs in Chinese medical supplies and equipment company, which account for nearly 70% of India’s APIs import requirements.

However, the ban by India of Chloroquine and hydroxychloroquine, which had been touted as possible treatment option for COVID-19, was significant to a region such as Africa, where the two products are previous generation anti-malaria treatment drugs, with the region accounting for up to 94% of the global malaria cases and deaths in 2019. (4)

Moreover, Africa remains one of the destination export markets for India’s bulk drugs with the export value in the continent reaching US$ 372.2 million by 2017 according to the Export/Import Bank of India. (5)

Egypt, South Africa are some of the top importers of bulk drugs from India. Egypt’s value of imports by 2017 was valued at US$ 95.9 million, which South Africa had a share of 23.1% of the total bulk imports by African countries.

Meanwhile, South Africa comes third in ranking of importers of India drug formulations, valued at US$ 389 million, with the total imports by the Africa region reaching US$ 2.8 billion at the end of 2017. (5)

Other big Africa importers of drug formulations from India include Nigeria, the second largest importers with 12.4% share, Kenya (10.4%), Tanzania (6.8%), Uganda (5.0%), Ethiopia (4.9%), Ghana (4.7%), Mozambique (4.3%), Congo D. Republic (3.0%) and Zambia (3.0%), according to the Indian Exim Bank. (5)

Other Indian pharmaceutical products’ export destinations include the US, accounting for share of 86.4% of the Americas market and Brazil with imports valued at US$ 196.5 million by 2017.

But with the raging COVID-19 pandemic, some of India’s top pharmaceutical export destinations in Africa may have been weakened hence unable to mobilize adequate resources for additional medicines as funds are channeled in combating the killer virus.

“Over one third of African countries have reported disruptions to essential health and immunization services throughout the pandemic and the onset of COVID-19 vaccinations,” according to the World Health Organization. (6)

“Two-thirds of these countries reported the reallocation of staff to provide COVID-19 relief as the main driver for the disruptions, but fear of contracting COVID-19 has also led to lower numbers of patients seeking care for other conditions,” said the UN health agency. (6)

Africa is also one of the regions that expected to benefit from the partnership of India’s Serum Institute of India with Gavi, a public–private global health partnership and the Vaccine Alliance and the Bill & Melinda Gates Foundation. The partnership focused on acceleration of the manufacture of an additional 100 million doses of future vaccines, “if proven to be safe and effective, for low- and middle-income countries in 2021.” (7)

But when COVID-19 hit India hard, with nearly 30.8 million cases and 408,000 deaths by the first week of July 2021, the partnership’s scheduled vaccine production and supply was delayed as the anticipated SII deliveries were caught up in the rush by India to contain the pandemic with additional vaccines required to meet demand in the local market. (8)

However, India is likely to scale up its pharmaceutical products’ export trade levels especially with the recent approval of four domestic companies-  Solara Active Pharma Science Ltd, Rajasthan Antibiotics Ltd, Dhatri Lab Pvt Ltd and Vital Laboratories Pvt Ltd- to manufacture Key Starting Materials (KSMs)/ Drug Intermediates and Active Pharmaceutical Ingredients (APIs) under the government-driven Production Linked Incentive (PLI) scheme. (9)

India, with an estimated US$41.7 billion worth of pharmaceutical industry, proposes to set up greenfield plants in four different target segments under the PLI scheme at an estimated cost of Rs 6,940 (US$93.0482) by 2030 for the manufacture of 1,1-Cyclohexanediacetic Acid, Meropenem, Ritonavir and Levofloxacin.

More low and middle income countries, including those in African region are also likely to benefit from the recent partnership between Merck & Co Inc with five pharmaceutical product makers in India for the manufacture and distribution of the company’s molnupiravir. (10)

As more lessons emerge from the disruption that has been inflicted by COVID-19 in the global healthcare system, it may as well be true to say when India & China pharmaceutical markets sneeze, the entire world catches the cold. 

REFERENCES;

1. https://www.dgft.gov.in/CP/

2. https://www.reedsmith.com/en/perspectives/2020/04/india-reverses-pharmaceutical-export-restrictions-shortly-after-imposing

3. https://timesofindia.indiatimes.com/business/india-business/government-bans-export-of-26-pharma-ingredients/articleshow/74467687.cms

4. https://www.who.int/news-room/fact-sheets/detail/malaria

5. https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwj7scLg6tvxAhXSyYUKHUpUAG0QFnoECAIQAA&url=https%3A%2F%2Fwww.eximbankindia.in%2FAssets%2FDynamic%2FPDF%2FPublication-Resources%2FResearchPapers%2F92file.pdf&usg=AOvVaw2EMMJWKgkq6TRcYAfSsL-b

6. https://www.afro.who.int/news/risks-and-challenges-africas-covid-19-vaccine-rollout

7. https://www.who.int/news/item/25-03-2021-covax-updates-participants-on-delivery-delays-for-vaccines-from-serum-institute-of-india-(sii)-and-astrazeneca

8. https://www.gavi.org/news/media-room/new-collaboration-makes-further-100-million-doses-covid-19-vaccine-available-low

9. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1700790

https://www.merck.com/news/amid-humanitarian-crisis-in-india-merck-announces-voluntary-licensing-agreements-with-five-indian-generics-manufacturers-to-accelerate-and-expand-global-access-to-molnupiravir-an-investigational-ora/

About the Author:

With great honor and pleasure, PharmaSources.com has now invited Shem Oirere as one of the original writers. He graduated from the University of South Africa with a bachelor’s degree in International Relations and Diplomacy and also holds a Diploma in Journalism from the London School of Journalism. He previously worked for the Kenya Times, Nation Media Group and The People Daily over a twenty-year span as a business writer and Sub-editor. He wishes to share a view of the scenes behind Africa's latest pharma market trends with the rest of the world.