Indian drugmakers produce one-tenth of all pharmaceuticals by volume. But prices of drugs sold has declined, eroding already-slim margins
60 years at Cipla, an Indian drugmaker where he is chairman, prepared him for covid-19. Production at its 30 plants fell by 70% nearly overnight in March as India’s government ordered a lockdown that made it hard for its 23,000 employees to work. Critical inputs, from packaging to active ingredients, became scarce. The price of some sourced from China shot up five-fold.
That is good news—and not just for Mr Hamied’s firm, or indeed his country, which has largely avoided drug shortages thanks to Cipla and its fellow pharma firms. The world relies on their health. Their revenues amounted to $40bn in 2019, half of it from exports. They produce one-tenth of all pharmaceuticals by volume, including 50% of the world’s vaccines, 40% of generics sold in America and a quarter of all medicine bought in Britain.
Fears of rising costs and depressed sales, as patients and hospitals everywhere limited non-covid treatments, have added to the existing concerns. Yet the coronavirus may be an inflection point for the industry, if it shows it can rapidly produce huge volumes of coronavirus drugs.
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