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Shanghai lockdown likely to disrupt the Indian pharma industry

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The Indian pharmaceutical industry braces for severe impact as another COVID outbreak in Shanghai causes China’s biggest city-wide lockdown since the outbreak of the COVID-19 pandemic two years ago.

As reported by ET, the halt in cargo operations at the two main ports of Shanghai and Shenzhen following the government regulation may be the cause for delays in receiving active pharmaceutical ingredients (APIs) and intermediates.

On Sunday, the Chinese government while announcing the city-wide lockdown in Shanghai informed that the city will be shut down in two stages over a period of nine days while authorities carry out intensive testing. China’s financial hub, which is home to 26 million people, is on its third day of lockdown today.

On March 29, Shanghai recorded 5,656 asymptomatic COVID-19 cases and 326 symptomatic cases against 4,381 new asymptomatic cases and 96 new cases with symptoms a day earlier, Reuters reported.

Shanghai houses the world’s largest container shipping port, and experts believe that the lockdown in the city will delay shipments in the days to come.

With the price of drugs and packaging costs on a rise, experts now fear that with shipments remaining on hold, a cascading effect on the supply chain will be seen.

India- the world’s third-largest drug producer by volume houses domestic companies like Sun Pharmaceuticals, Dr. Reddy’s Laboratories, Mankind, Lupin, Glenmark, Torrent, Aurobindo Pharma, and Abbott. These drug companies import 70 percent of raw materials or intermediates from China, which is used to make major antibiotics, paracetamol, as well as diabetes and cardiovascular drugs.

An expert sharing his view highlights that with about 90 percent of India’s requirement of antibiotics being fulfilled by China, the overall industry will be impacted if the lockdown continues.

Of the total raw material imported from China, 20-30 percent arrive by cargo flights, while 70 percent comes by ship as the air route is more expensive.

At present, the industry is not facing any shortage as companies maintain extra inventory.

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