Anti-dumping Duty On Vitamin C: Is It The Only Solution?
A global crisis needs a global response— precisely what the pandemic taught us. The outbreak has enabled economies to help each other and manage the pandemic from medicine supplies to treatment. The role of enabling and patient-friendly policies cannot be ignored in the case of global responses to a situation like COVID-19 and in overall interest of the patients and the industry. Coronavirus, evading our best science, also taught us the value of innovations, access to affordable healthcare and the need to prepare for the future.
As a classical example, the recent recommendation by DGTR (Directorate General of Trade Remedies) to the Ministry of Finance, to impose anti-dumping duties on Vitamin C imported from China is something we need to dissect. There are many questions in play here — how will this decision impact the supply of Vitamin C in India during ongoing pandemic?
Anti-dumping duty imposition is a measure to rectify the situation arising out of dumping goods and the distortive effects of the trade from one country to the other. It is a protective tariff that a domestic government, at times, imposes on imports if it believes they are priced below fair market value. This use of anti-dumping measures is allowed by the World Trade Organization which is usually levied for 5 years.
The DGTR has concluded in its probe that the imports of Ascorbic Acid (Vitamin C) from China are entering the domestic market not only at a price below the level of the selling price but even at the cost of sales. This probe was initiated last year into the imports of Vitamin C from China in the wake of the domestic API manufacturers making a case for the imposition of the levy for understandable reasons.
On one hand, we strive to make the domestic API suppliers’ market stronger. But on the other, is it fair to risk the supply chain with such anti-dumping duties that can jeopardize product availability for customers? What will be the implications to the customer - domestic formulation manufacturers and patients? What are the remedial measures we should zoom in on? These questions need to be answered.
This latest move by the government may lead to an increase in the price of raw materials for making medicines prescribed by doctors as one of the immunity-boosting measures. This will not only hamper patients' access to these medicines but may also hit production levels of companies who will have to pay a premium for procuring raw materials while having to sell at a standard price.
Domestic formulation manufacturers of Vitamin C who fall under the DCGI (Drugs Controller General of India) and the NPPA (National Pharmaceutical Pricing Authority) face challenges in producing sufficient affordable medicines for the consumers, as they are subject to price control. Remember that while there is price control on the final product, there are no such controls for raw materials that go into the product. So domestic API suppliers can increase raw material costs indiscriminately, while domestic formulation manufacturers have to somehow sustain the finished products at the same rate.
Keeping the view of above, the unstable pricing policies and inadequate supply of raw materials have affected the production capacity of domestic formulation pharmaceutical companies that have been producing affordable drugs for decades. The consequences of such steps by the government are enormous. For example, patients will have minimal access to affordable medicines – this is a major threat to India’s ambition of providing quality healthcare to all citizens. The policies of regulating the price of the final product while increasing the costs of raw materials will not aid patients’ access to essential medicines such as Vitamin C.
These are some of the possible implications on the existing pharma trade and on the masses. Notably, Vitamin C sales grew drastically in 2020 during the COVID-19 pandemic, thanks to the fact that immune health and vitamin C became synonymous. Even today, when things are seemingly better, experts predict an imminent the 3rd wave and preventive healthcare is now the norm and that includes immunity building.
While trying to protect the interests of the Indian API suppliers’ companies, India should not restrict our patients’ access to medicines that are otherwise available at affordable prices but are missing from the market due to restrictive policies. These policies may render Vitamin C unviable and lead to shortage in the market of a much-needed product.
The Indian pharmaceutical API manufacturers are of the view that when they can suffice the needs of domestic formulation manufacturers at a competitive price, there is no dire need for India to import raw materials from any other country. We are inquisitive to see where we are headed in the coming future with our efforts - of availing sufficient Vitamin C production at affordable prices and quality. This is possible by enhancing our own production capacity at consumer-friendly prices. There is a lot of work to be done to make India’s infrastructure more competitive at a global stage, only then can we be self-dependent. This does not come out of restricting others, but rather enhancing and improving our domestic industry in every aspect.
