With Covid-19 almost waning, Indian pharma companies are struggling with the excess stock of key drugs that were in demand during the pandemic, News18.com has learnt.
Favipiravir and Remdesivir became the most sought-after experimental drugs for the treatment of Covid-19 patients and till August 2021, the sales of these drugs — which were in short supply and triggered frantic SOS calls on social media — had gone up by over 2,000 per cent and 700 per cent since their launch in June 2020.
Another drug, Liposomal Amphoteric B, came into the spotlight when doctors started diagnosing multiple cases of black fungus as an after-effect of the overuse of steroids.
While the pharma industry up-scaled its production capacity to meet the requirements during the pandemic, the sudden fall in Covid-19 cases has impacted the demand for these medicines.
According to industry officials, during the second wave, drugmakers had invested a huge amount in purchasing raw materials and other essential ingredients to ensure an uninterrupted supply of medicines. However, all these medicines, machines, and raw materials have become redundant now due to extremely low demand.
The lobby of more than 7.5 lakh chemists across India says the stock of over Rs 5 crore has been returned to pharma companies after noticing a major dip in sales of these drugs.
“Earlier, the government controlled the supply of Remdesivir. We were involved in the trade of Covid-specific medicines in the final leg of the second wave. Since then, we were selling various brands of Favipiravir and Remdesivir. Most of the stock return worth Rs 4-5 crore from across India has been accepted by the pharma companies,” Rajiv Singhal, secretary general of All India Organization of Chemists and Druggists, told News18.com.
“Some stock is still pending with us due to ongoing dispute between companies and chemists but the major stock has been sent back,” he added.
More loss for Remdesivir makers, Favipiravir export avenues open
Pharmaceutical companies involved in the manufacturing of Remdesivir have booked higher losses than those involved in the production of Favipiravir, industry insiders said.
“Remdesivir has been declared of no use by the World Health Organisation. Hence, there is no demand from foreign countries as well. However, there is scope for exports of Favipiravir to countries that are still struggling with the waves of Covid-19,” said an industry official who works with a leading Mumbai-based pharma company.
Glenmark confirmed to News18.com that the company has exported the stock of Fabiflu to various countries. “FabiFlu (Favipiravir) production was undertaken according to the Covid-19 situation and the subsequent demand for the drug in the country. However, as the situation improved in the country, Glenmark exported the excess stock to the countries where the pandemic was still prevalent, thus optimising our supply and reducing our stocks,” a spokesperson said.
The spokesperson added that the company has maintained limited inventory to meet any unforeseen demand due to a spike in cases in India. It has supplied FabiFlu to countries across South-East Asia, the Middle East, European Union and South America.
However, not everyone can find avenues to export Favipiravir.
An owner of a medium-scale pharma company, who requested anonymity, told News18.com that he has booked a loss of Rs 1.5 crore on his stock of Favipiravir. “I tried to export the drug but could not sell it due to shorter shelf life,” he said.
Starting June 2020 till last year, Remdesivir and Favipiravir have remained the top-selling medicines in the Indian pharmaceutical market.
A total of 25 crore pills, 50 lakh vials and sales of Rs 2,800 crore were registered from June 2020 to August 2021.
Excess stock of drugs manufactured for black fungus
Another industry source, privy to the information related to stock of drugs manufactured to battle the wave of black fungus cases, said goods worth Rs 22 crore are pending with drugmakers.
These medicines include Liposomal Amphotericin B injections, Posaconazole Tablets, raw materials, excipients and other essential chemicals. “GST reversal on this value would be around Rs 40-50 lakh,” a source said.
He explained that these drugs were manufactured during the first and second quarters of 2021-22, hence, the shelf life of these medicines is also reduced.
“Hospitals and institutions are also not accepting such Covid-related medicines due to short shelf-life. The raw material and finished goods both are going to expire soon. Apart from the loss of drugs’ raw materials and funds, the industry is facing another crucial loss in terms of Goods and Services Tax (GST) reversal. On expiry of these drugs and raw materials, we have to reverse the Input tax credit (ITC) on expired or destructed goods as well as per CGST Act 2017, Section 17 sub section 5(h),” he said.
A common problem that the industry has been facing is the shorter shelf-life of these drugs as they were under “emergency use authorisation”.
“Initially, these drugs were given a shelf life of three months and then, as data kept on coming, the shelf life was extended for up to 15 months. Due to the shorter expiry term, the majority of the stock is set to expire in the coming few months,” Singhal from AIOCD said.
Government must intervene
While the industry expects the government to use this stock in government hospitals and institutions as Covid-19 cases still surface, no move has been initiated by the government so far.
“We would request the government to waive the reversal under GST for Covid-related drugs which were manufactured during this period,” said an industry official running the medium-scale pharma company quoted above.
The government seeks information on a monthly basis on the CDMS Portal specifically developed for monitoring Covid-related raw materials, equipment, drug and formulations. It is being monitored by the Central Drugs Standard Control Organisation (CDSCO).
“Every month we put remark of slow-moving inventory and near-expiry inventory to appraise authorities about this issue but there has been no relief so far,” said the industry source talking about the stock of black fungus medicines.
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