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Covid-19 and the Pharma Sector – There’s More to this than Meets the Eye!

Every decade has seen a global pandemic hitting the ground really hard and spreading fear and chaos. Be it the avian influenza, SARS, plague in the early part of the 20th century. Even the fall of Skylab space shuttle at the end of 70s caused much scare to humanity. Yes, that created a War of the Worlds kind of scenario at that time. So, the invisible hand hits a pause button on the fear and resumes it at an unprecedented time.

The recent coronavirus outbreak is one such unexpected event that has all the capacity to spawn a bio war across countries. This can’t be stopped by a superhero atypical to the Marvel and DC universe, but by everyone who makes a super decision to stay indoors. That’s one side of the story, the other side is the pandemic’s impact on the economy and different industries. Some are totally shut and some are the worst hit. The Pharma industry has its highs and lows – increase in the production of many life-saving drugs and an increase in overall costs.

Let’s look at how the Pharma industry is deeply affected from this global pandemic

The Price of Drugs touching the roof

Let’s sample this – the price of a finished good is influenced by procurement of raw materials. If raw materials travel across the world and reach the manufacturing units, the price escalates. Similarly, if raw materials coming from a regular supplier is stopped, then the other alternatives may prove costlier. The same is evident in the current situation with an embargo on the trade of Active Pharma Ingredients (APIs) So, less availability of APIs and that resulted in increased cost of production. As per the official sources, the cost of paracetamol is Rs 400-450 kg compared to the previous rate of Rs 250-300 kg. That’s a lot.

Medicines are Out of stock and Alternative Drugs are coming in

With manufacturing hitting a roadblock without incoming supplies, the world is going gaga over alternative medicines and drugs. The closure of ties with China has forced Governments to seek recommendations from health research bodies of states to overcome the problem of non-availability of drugs. As per the official estimates, 57 APIs of vitamins, steroids, hormones and antibiotics may go out of stock soon. So pharma companies are pulling all the strings to bring out the alternatives in the market. That’s another big impact of Covid-19 outbreak on the industry.

Inter-State Transport Challenges

Another major concern for the pharma companies during the lockdown period is supply chain and logistics. A majority of drug consignment that comes from pharma clusters like Goa and Sikkim is not able to reach the retailers. The distribution channels are affected across all the touchpoints. This has caused a logistical nightmare. Lack of manpower and transportation are adding to their woes. The outbreak of COVID-19 caused serious problems with the supply chain resulting in a shortage of critical medical products. This is causing a hindrance to the accessibility of drugs at medical stores. Consumers are struggling a lot even to get OTC drugs.

Restriction on sale of drugs

Hydroxychloroquine is considered a magical drug during these tough times. In the laboratory studies supported by preclinical data, It’s found to be effective against the virus. So, the government has restricted the sale of this essential drug. Recently, there has been a lot of hue and cry from the US government on its supply and India has to partly succumb to its demands.

There are also restrictions on the export of diagnostic kits. There is also a ruling on the prices of medical devices, and it states that there is a threshold on pricing and companies can’t go beyond that. This again affects the exchequer of the pharma companies. On one side, that’s a good move from the government to curb inflation, but on the flip side, pharma companies are losing their piece of pie amid the stringent rules.

Impact on Manufacturing

A pharma manufacturing plant works on the collective effort of many people and parties. Few plants are facing issues with raw material supply, whereas few others don’t have transport facilities to move their goods to the market. There are manpower issues and restrictions by law enforcement authorities on distribution. These factors have stalled the production and movement of goods to a large extent. There are problems to get printers to print labels and packages, and, in some areas, coal and other fuel that are critical for manufacturing is not coming in. Bottles and caps used in drug manufacturing won’t fall under essential services so these little goods are in scarcity. The situation is getting slightly better in cities, the problems still persist in the deeper pockets of the country.

The Way Forward

The Government should encourage the local manufacturing of APIs. This can be done by creating the necessary framework in the country. There has to be quick checks and measures to overcome the shortage of drugs. The major setback for pharma manufacturing is the lack of ancillary supplies. So, they have to be put under essential services. These areas have to be worked on to curb the problems.

The drugs that come out of pharma companies during the pandemic are perceived as elixirs. Therefore, uninterrupted supply of the same is the need of the hour. By taking all the measures to keep the pharmaceutical industry up and running, the coronavirus outbreak can be brought to control. This is the only way to hit a stop button on the fear.

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