Context: Recently, the Technology Information Forecasting and Assessment Council (TIFAC), an autonomous organization under the Department of Science & Technology has brought a report titled ‘Active Pharmaceutical Ingredients- Status, Issues, Technology Readiness, and Challenges’.
Major recommendations given in the report

• Focus on engineering and scale aspect of technology development.
• Need for Mission mode Chemical Engineering with defined targets for uninterrupted synthesis of molecules.
• Create mega drug manufacturing clusters with common infrastructure in India.
• Technology platform to be developed for biocatalysis towards reducing process steps for cost optimization.
• Scale supporting techno-economic feasibility.
• Attention to technologies like hazardous reactions, flow chemistry, cryogenic reactions, and membrane technology.

What is an API?

• Every medicine is made up of two main ingredients — the chemically active APIs and chemically inactive, excipients, which is a substance that delivers the effect of APIs to one’s system.
• API is a chemical compound that is the most important raw material to produce a finished medicine.
• In medicine, API produces the intended effects to cure the disease. For instance, Paracetamol is the API for Crocin and it is the API paracetamol that gives relief from body ache and fever.
• Fixed-dose combination drugs use multiple APIs, while single-dose drugs like Crocin use just one API.

How an API is manufactured? 

• API is not made by only one reaction from the raw materials but rather it becomes an API via several chemical compounds. The chemical compound which is in the process of becoming an API from raw material is called an intermediate.
• There are some APIs that pass “through over ten kinds of intermediates in a process when it changes from being a raw material into an API”. The long manufacturing process is continued until it is purified and reaches a very high degree of purity.

What’s the concern for India now? How COVID 19 induced pandemic has affected?

• Despite being a leading supplier of high-quality medicines to several countries, Indian pharmaceutical industry is highly dependent on China for APIs.
• In the 2018-19 fiscal, the government had informed the Lok Sabha that the country’s drug-makers had imported bulk drugs and intermediates worth $ 2.4 billion from China.
• But with frequent lockdowns due to the deadly coronavirus outbreak, supplies of raw materials from China to produce drugs for treating HIV, cancer, epilepsy, malaria, and also commonly-used antibiotics and vitamin pills, are likely to be hit.

How India lost its API market to China?

• During the early 90s, India was self-reliant in manufacturing APIs.
• However, with the rise of China as a producer of API, it captured the Indian market with cheaper products and it eventually led to high economies of scale for China.
• China created a low-cost API manufacturing industry. The industry was backed by the low cost of capital followed by aggressive government funding models, tax incentives.
• Their cost of operation is one-fourth of India’s cost. Even the cost of finance in China is 6-7 per cent against India’s 13-14 per cent.
• So, due to low-profit margins and non-lucrative industry, Indian pharma companies over the years stopped manufacturing APIs.