API exporters say latest EU move is a non-issue
Exports of APIs worth around US$1bn from India to the European Union are likely to be hit when the Falsified Medicines Directive comes into force in the middle of this year.
From July 2013, every consignment of APIs made in India and exported to the EU is to be inspected by a local competent authority and certified that the product being shipped complies with cGMP standards.
Though the volume of fake medicines seized by European authorities has risen over the years, counterfeits continue to find their way into the supply chain. In October last year, more than £6.5m worth of counterfeit and unlicensed medicines was seized across the world as part of an international crackdown on the illicit drug market.
The number of counterfeit medicines seized in the EU soared by more than 700% in 2011, new data shows. In that year, EU customs officials seized more than 27 million fake medicinal products in 2,500 cases of anticounterfeiting enforcement. In 2010, the fake medicines figure was 3.2 million.
Several Indian drug majors have termed the EU’s latest move as highlighting a non issue and generating negative publicity.
API exporters in India such as Dr Reddy’s Laboratories, Cipla, Shasun Chemicals, Ipca Labs, Aarti Drugs and Arch Pharmalabs have said that Europe has decided on the Falsified Medicines Act to overhaul the entire health and pharma supply chain mechanism. It should not be misconstrued as anything else and should not delay clearances at the ports.
After the US, the EU is the biggest importer of Indian APIs. India exports around $13.8bn of drug formulations, APIs and ayurvedic and herbal products every year. Of this, APIs alone comprise 40%, with the US accounting for 27%, followed by the EU at 19%, Africa at 17% and West Asia at 7%, among others.
Industry estimates put exports growing at a rate of 33% every year, despite intense competition from China, which exports four times as much as India to the EU.
Although India has an option of becoming recognised as an equivalent country to the EU, which would obviate the need for the directives and the accompanying certificates, China does not have it that easy. APIs exported from China are often made by chemical companies that are neither certified nor inspected by Chinese drug regulators, reports suggest.
As many as a third of the malaria drugs in countries like Uganda and Tanzania are fake or substandard, with a major portion originating in China. The country has denied allegations that it has been exporting huge amounts of counterfeit medication to Africa.