As COVID-19 spread from Wuhan to the rest of the world, it created extraordinary challenges for manufacturers, especially those counted on to bring essential medicines to patients in need. India, and Gujarat in particular, has a strong reputation for providing these drugs. Yet, the pandemic exposed significant vulnerabilities in manufacturing supply chains, so that China is now being viewed as a less reliable partner, and companies and countries are looking to both diversify their supply chain and bring it nearer to home.
For Gujarat, this period has posed enormous challenges, however, the trend of countries decoupling manufacturing away from China could potentially be doubly beneficial. There will be more opportunity for Gujarati companies to provide APIs, as well as market share up for grabs for those that possess the capability of meeting the stringent regulatory requirements of the developed markets in the West. As Sudhir Vaid, chaiman and managing director of Concord biotech, put it: “The main problem is that India is incredibly dependent on China, especially for its intermediates. Concord has tried to ease this dependency by producing in-house.”
Likewise, Vinit Shah, chairman and managing director of Saga Lifesciences, stated: “COVID-19 seriously paralyzed the availability of APIs in India. The few APIs that are available have seen prices rise dramatically. And from the 22nd of March, all of India was under lockdown.” He continued: “Our biggest concern at this point is logistics. Cargo flights have not been operative for weeks, ships are not moving, freight charges have sky-rocketed and transit time has been unpredictable.”
According to FDCA Gujarat figures, India imports about 65% of its basic chemicals, intermediates and APIs from China. As a result of the lockdown in China and subsequent shutdown in India, March and April saw a drop in production of 70% compared to the same period the previous year in Gujarat. The situation has since improved and, as of end of June, Gujarat companies operate at 80% capacity.
Despite the inability to operate at full capacity, Gujarat’s pharmaceutical industry is still experiencing rapid growth. Saga Lifesciences recorded 25% growth for the 2019-20 fiscal year, even with a two month COVID related drop off. Infinium Pharmachem, a provider of iodine derivatives, expects to maintain “status quo” growth of 20% for the year and Corona Remedies is projecting a strong bounce back in activity for the coming year, regardless of lingering pandemic related challenges. “Right now we are seeing excellent growth in the Indian market, because these Indian manufacturers are receiving many requirements to develop new APIs from all over the world. Gujarat is a good manufacturing place for raw materials and base chemicals. The advantage of working here is that we can obtain all we need from nearby locations like Ankleshwar or Ahmedabad. Indeed, it is only thanks to being in Gujarat that we were able to continue our activities during the COVID-19 lockdown,” said Sanjay Patel, managing director of Infinium Pharmachem.
The statistics on COVID-19 deaths are undeniably grim. An excess of 500,000 people globally have perished from the ghastly disease (June 2020 figures) as companies around the world are working at a feverish pace to bring vaccines and therapeutics to market.
Therapeutics are more likely to be approved on a significantly faster timeline than vaccines, because clinical trials are shorter, thus potential to get to market is quicker for antiviral drugs like remdesivir. The antiviral is already on the market for emergency use and results are promising that it directly affects infectivity of the virus and its reproduction capacity in cells. The first results from a study conducted by the US National Institute of Allergy and Infectious Disease (NIAID) in hospitalized patients with COVID-19 showed that remdesivir shortened time to recovery by an average of four days. In taking the example of the United States, these results would translate into earlier hospital discharge, which would yield hospital cost savings of approximately US$12,000 per patient.
There is concern, however, that if companies do not plan ahead for manufacturing there may be challenges in terms of timely availability of this effective treatment for patients. Accelerating and increasing availability by trying to get ahead of capacity bottlenecks is essential, and several Gujarati companies have been chosen to display their manufacturing capabilities with the drug.
Antivirals Favipiravir and remdesivir were recently greenlighted for treatment of Covid-19 patients in India and both have a Gujarat connection. Remdesivir’s generic version is being manufactured in Vadodara, while the active pharmaceutical ingredient (API) of favipiravir is being made at Ankleshwar in the state. Cipla has also launched a generic version of remdesivir licensed from Gilead Sciences and Glenmark Pharmacueticals has come out with an oral antiviral version of favipiravir. The Drug Controller General of India (DCGI) has recently approved both of these medications.
The COVID pandemic has brought about a potential inflection point for Gujarat’s pharmaceutical manufacturers, and this is in large part a result of years of preparation, wherein facilities were brought up to international standards that allowed this opportunity to come to fruition. According to Dr. H.G. Koshia, commissioner of Gujarat’s FDCA: “Gujarat has the lion’s share when it comes to exports in India, with 28% of all pharma exports leaving from the shores of our state. With over 700 WHO-certified production facilities, drugs made in Gujarat are authorized to sell around the world. More than half of our exports reach highly regulated markets like the United States or Europe. 130 facilities are approved by US FDA.”
In addition to world class facilities, there is a higher degree of confidence that Gujarat companies can handle the manufacturing of complex drugs. The Times of India reported that high quality drugs produced in Gujarat have a failure ratio of 1.69% while the national average is 4-5%.
COVID-19 has posed a generational challenge to economies and health systems around the world. In Gujarat’s case there is a silver lining, in that it sits in pole position to be a beneficiary of a constrained global supply chain. Given the limited options drug companies have to meet pressing and immediate manufacturing needs, Gujarat, with its mix of advanced infrastructure, raw materials and human talent, stands as a strong manufacturing option. As a result, the COVID pandemic will likely act as an accelerant of trends previously put into motion that were increasingly attracting businesses to the state. The ultimate test of Gujarat’s readiness will come in shorter order, as the global pharma industry works to assuage the effects of COVID.