The effects of increasing tension in the Middle East and Iran war are now visible on India’s pharmaceutical industry as well. In the last two weeks, the prices of raw materials used in making medicines, i.e. Active Pharma Ingredients (API), have increased by about 30 percent. Industry experts say that if this situation continues, the prices of medicines may increase in India in the future.
According to officials associated with the pharma sector, there has been a shortage of container ships due to the war, which has affected the supply of raw materials from China. China is the largest supplier of raw materials to Indian pharmaceutical companies. Due to supply disruption, pressure on domestic production may increase and companies may pass the burden of increased costs on to customers.
Sharp rise in prices of many essential raw materials
According to industry related data, there has been a huge increase in the prices of many important raw materials. For example, the price of glycerine has increased by about 64 percent since December, while the price of paracetamol has increased by about 26 percent.
Experts in the pharma industry say that the prices of pharmaceutical solvents made from petrochemicals have also increased by 20 to 30 percent in a week. Due to the ongoing conflict in the Middle East, global oil supply is being affected, due to which the cost of production is increasing further.
Pharmaceutical companies sought relief from the government
Experts say that if the war continues for a long time, the situation may become more serious. For this reason, the pharmaceutical industry has demanded from the government to allow increase in the prices of medicines, so that the rising costs can be compensated. The industry says that drug prices are largely controlled in India, so it is difficult for companies to bear the sudden increase in the cost of raw materials.
Freight charge doubled, supply also in danger
Due to the war, shipping routes have been affected and the cost of freight transportation has increased rapidly. In many cases, freight charges have doubled and each shipment is being charged an additional $4,000 to $8,000. Experts believe that if this situation continues for some more time, the supply and availability of essential medicines may also be affected.