Prices of medicines in India may go up within a month due to energy supply shock from the Iran war, a senior Mankind Pharma Ltd. executive warned on Monday.
Arjun Juneja, chief operating officer of the New Delhi-based drugmaker, said the sector has so far been insulated as companies were operating on older inventories. However, he cautioned that the impact will begin to surface over the next few weeks.
"In the next 15–20 days or over the next month, the effects will start coming in, especially due to shortages of LPG and other petroleum‑related products that are critical for manufacturing APIs and pharmaceutical formulations,” Juneja told NDTV Profit.
He added that the supply disruption is likely to lead to inflationary pressures across the industry. Higher input costs driven by energy and petrochemical shortages could result in price hikes for pharmaceutical products.
Many medicines are derived from crude oil or its byproducts. Petroleum-based chemicals serve as raw materials in the pharmaceutical industry to create various drugs, solvents, and medicinal products. Crude oil is refined into petrochemicals like benzene, toluene, ethylene, and propylene, which are then used to manufacture active pharmaceutical ingredients (APIs) and other medical products.
Moreover, medical plastics for syringes, IV bags, and pill packaging are petrochemical derivatives.
International crude oil prices have jumped from around $70 per barrel before the outbreak of the Iran war late February to as much as $120. The virtual blockade of the Strait of Hormuz and attacks on oil and gas infrastructure across the Gulf region have scuttled flows to India.
The government was forced to divert gas supply from industrial units to households to contain the shock for consumers last month. A drastic rise in drug prices may prompt regulatory intervention.
Juneja further said supply situation will not normalise quickly. According to him, it could take anywhere between six months to a year for supply chains to stabilise, depending on how geopolitical tensions evolve and energy markets adjust.
Mankind Pharma sells both both over-the-counter consumer healthcare and prescription drugs. Top offerings include 'Manforce' condoms, pregnancy detection kit, contraception drugs and acne soap and gel.
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