The Central Drugs Standard Control Organization (CDSCO), which is India’s central regulatory body for pharmaceuticals, went on to withdraw the power held by the state governments to issue NOCs for manufacturing banned, unapproved, or even new drugs when it comes to export purposes on April 30, 2024. This was done in order to remove the ability of the state governments to manufacture drugs that were not approved for export.
Indian pharmaceutical businesses have been subjected to extreme scrutiny for selling contaminated pharmaceuticals, particularly cough syrups that were marketed in Gambia and Uzbekistan, which led to the deaths of numerous children. This action comes as a consequence of the strong scrutiny that has been directed against these companies.
There have also been instances in which pharmaceutical companies have recalled their goods due to flaws that occurred during the industrial production process. In spite of the fact that the pharmaceutical industry in India has been subjected to a great deal of criticism over the course of the last few years, the nation has continued to strengthen its position as the pharmacy of the world.
According to the Ministry of Commerce and Industry, India exported medications and pharmaceuticals for a total of $28 billion in the fiscal year 2023–24. This represents a 10% rise from the previous fiscal year. If we take a look at the data, we can see that India exported drugs and pharmaceuticals.
Eventually, Indian pharmaceutical exports expanded their global footprint to include nations such as Comoros, South Sudan, Montenegro, Chad, Brunei, Latvia, Sweden, Haiti, Ethiopia, and Ireland. These countries were among those that received Indian pharmaceuticals. It became discovered that the United States of America, the United Kingdom, South Africa, the Netherlands, and Brazil were the most important markets for Indian pharmaceutical exports.
It has been reported that the United States, which accounted for more than 31% of the country’s pharmaceutical exports in the fiscal year 223-24, has been experiencing very high levels of medicine shortages.
Disruptions in the supply chain are one of the most important aspects that are contributing to shortages, despite the fact that there are a great number of variables that are causing shortages. The United States Department of Health and Human Services went ahead and issued a white paper in April 2024 that was concerned with policy issues in order to avoid medicine shortages and reduce supply chain vulnerabilities across the United States. This was done in order to prevent drug shortages.
Generic medications are priced at such a low level that they fail to generate adequate incentives for purchasing, distribution, and redundancy. The white paper goes on to point out some prominent issues such as concentration among the middlemen, a lack of transparency, and the prices that are driven to such low levels that they are driven to such low levels. In accordance with the white paper, the moment has come to not only rebuild resilience in relation to vital networks but also to restore the equilibrium that has been lost. Moreover, according to Sharvil Patel, the MD of Zydus Lifesciences and the Vice President of the IPA, this is not only sensible but actually essential.
As a matter of fact, an analysis conducted by IIFL Securities on April 30, 2024, went on to suggest that Indian generic enterprises with a focus on exporting are more likely to capitalize on the current condition of medicine shortages throughout the United States. Moreover, their study suggests that among the generic businesses in India, such as Aurobindo, Sun Pharma, and Gland Pharma, all of them have the biggest exposure to products that are in short supply in the United States. This is the conclusion that can be drawn from their findings. The reality of the matter is, however, that the supply chain that is responsible for supporting the exports of medicines from India is subject to a great deal of disruption. These interruptions include extended transit times as a result of geopolitical concerns that occur across the Red Sea, as well as high air freight prices as a result of the high demand.
According to one of the leading authorities in the pharmaceutical industry, the routes in both the United States and Europe are being severely impacted. It is important to take notice of the fact that the amount of time it takes for marine freight to go from India to Europe has increased from 24 to 45 days, which is a twofold increase. In addition to the rise in the number of nautical miles, there has also been an increase in the rates, which have also increased significantly.
Because of this, shipping goods by water is no longer a practical option.
Air freight is the only alternative that is still available to them in order to maintain the integrity of their inventory throughout all of their target markets and to guarantee that there will be no scarcity. However, the reality of the matter is that even airfreight costs have increased, which has forced pharmaceutical businesses to suffer a significant knock on their margins. These margins, by the way, are already decreasing in this area of the pharmaceutical industry, which is known as the generic pharmaceutical industry.
Continuing on, the official said that the current crisis has also resulted in a shift in the proportion of drugs that are transported by each means of transportation. Taking into account the divide, on the European lane, they used to send forty percent of their shipments by the air and sixty percent through the sea. However, this has changed quite a bit in recent years, as air currently accounts for eighty-five percent of all shipping modes.
One of the owners of a consultancy business has said that in order to address the problem in the supply chain, pharmaceutical shippers have used a number of different techniques. Despite this, they all acknowledge that the issue has caused a disruption in the usual flow of goods. According to him, shippers who are able to pay very high air freight rates are choosing to engage in this mode of transportation in order to satisfy the requirements of the market. On the other hand, there are shippers who are reliant on sea transportation and, as a result, are required to endure much longer transit times.
In point of fact, shippers are making an effort to prioritize their shipments with regard to their importance. As of right now, only those pharmaceutical shipments that are really urgent are being sent out. In spite of the fact that there are no individuals who are expecting that the issue in the Red Sea will be resolved very soon, shippers are now hoping that the costs for sea and airfreight would drastically decrease.
The pharmaceutical industry in India is also preparing for a future in which new kinds of pharmaceutical goods and solutions are going to emerge, which will need the development of unique kinds of logistical services. According to the studies, India is really becoming a very bright destination in terms of clinical trials within the pharmaceutical industry. This sector is going to need extremely distinctive and specialized logistics solutions in order to meet the demands of the new destination.
According to Grand View Research, the size of the clinical trial market in India was estimated to be worth $2 billion in 2022. It is anticipated that the market would expand at a compound annual growth rate (CAGR) of 8% from 2023 until 2030.
FedEx Express is said to have introduced the FedEx Life Science Centre in Mumbai in February 2024. According to the firm, this facility is establishing a new standard in the clinical trial supply chain not just in India but also all across the globe.
At the time of the launch, the vice president of FedEx Express, marketing for the Middle East, India Subcontinent, and Africa- MEISA, Nitin Navneet Tatiwala, remarked that this is going to act as a one-stop shop in terms of clinical trial storage as well as the distribution requirements of healthcare customers across India. This new center is in addition to FedEx’s existing Life Science Centers, which are located in the United States of America, South Korea, Japan, Singapore, and the Netherlands. As a result, FedEx has created an international network of storage and distribution depots that are able to support their healthcare customers as well as pharmaceutical customers.
