Clavulanic Acid

New Delhi: Medicines in India may get cheaper following a significant drop in the prices of active pharmaceutical ingredients (APIs) and intermediates in China. Lower API costs will potentially reduce manufacturing expenses for generic drug makers, slashing prices of medicines, industry experts told ET. According to people in the industry prices have fallen by at least 35-40% and are expecting a further drop in the next coming months. For instance, prices of Paracetamol API have dropped significantly from ₹900 per kg during the pandemic to ₹250 per kg now. Amoxicillin, which was ₹3,200 per kg, is now ₹1,800 per kg. Likewise, Clavulanate was ₹21,000 per kg and currently ₹14,500 per kg. "We are seeing a drop in prices of APIs and intermediates and hopefully the patient at large would benefit. China's massive expansion in API factories post Covid fuelled by strategic investment has created overcapacity. This has led to the reduction in the prices, and we are expecting a further drop in the near future," said Mehul Shah, who tracks the Chinese pharmaceutical industry. India relies heavily on China for API imports, with around 70% of its APIs coming from China. "This dependence exposes Indian manufacturers to price volatility and supply chain disruptions," said Dinesh Dua, former chairman of the Pharmaceutical Export Promotion Council . Shah said prices are expected to go down further, and hopefully this will translate into reduction of medicine prices in India . "NPPA would be monitoring it and notify the downward revisions," said another expert. However, all is not well, said Namit Joshi, chairman, Pharmaceuticals Export Promotion Council of India (Pharmexcil). He said the surge in domestic demand within China also created a demand-supply imbalance, disrupting normal pricing behaviour. "This led to an unusual and steep drop in global prices, with "Chinese API quotes falling well below sustainable manufacturing levels. Such-aggressive under-pricing caused clear market injuries for several Indian API manufacturers, who were suddenly operating in an environment where prices were distorted rather than market-driven. The situation escalated to a point where inquiries were initiated within China itself, as quotations had fallen below cost, prompting regulatory attention," Joshi said. The reality is that the PLI ecosystem is operating under significant stress, driven largely by predatory under-pricing from China across several PLI-notified product categories. "This has compressed the competitiveness that the incentive was designed to unlock," he said. Dua said while raw material price fluctuations in China pose challenges, India's initiatives like PLI, bulk drug parks and R&D sops aim to strengthen its API sector and boost export competitiveness on a long-term basis. By Teena Thacker ,