InvestorQ : Is it true that Cipla and other pharma companies are also looking at alternative sources of API from India and also other countries?
Chandralekha Desai made post

Is it true that Cipla and other pharma companies are also looking at alternative sources of API from India and also other countries?

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Mitali Bhutta answered.
1 year ago
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You are right that Cipla and a few others are exploring alternative supplies to meet the gap. In the last one month since the virus scare broke out in China, many India API companies have nearly doubled their stock prices. The argument is that a reduction of API supply from China would mean greater demand for APIs from India. But there are 3 challenges to this alternative supply argument. Firstly, only China can manage the volumes of APIs to feed the Indian pharma industry. Secondly, relying on other countries has cost implications, which could change the economics for pharma manufacture. Lastly, most of the other suppliers also are likely to have a supply chain link to China and that is invariably likely to get impacted. That means; a Turkish API company or a Vietnamese API company may still be relying on China for many of its critical components. So the China link is much bigger.

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