The Impact of Covid 19 on Pharma Sector
Worldwide Coronavirus has produced an unstable environment for people. This has spread all over the world and called as a Pandemic by WHO. This is stopped many of economic activities due to contagious disease and has no cured till date to fight with Corona.
Vijay
Apr 28, 2020 09:52
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Worldwide Coronavirus has produced an unstable environment for people. This has spread all over the world and called as a Pandemic by WHO. This is stopped many of economic activities due to contagious disease and has no cured till date to fight with Corona. It has produced economic impact on globe and India. It may produce recession in many part of the world. In every sector in India most of the products are imported from china, especially in medicine and manufacturing industry.
Indian pharma companies dependent on Chinese exports are likely to be impacted if the situation in the neighboring country following the novel coronavirus outbreak persists for one or two months. As a country, we were very dependent on China as far as APIs (Active Pharmaceutical Ingredients) are concerned. There was New Year vacation there, right before coronavirus situation began there.
Several industries had already imported APIs beforehand. But if the low imports continue for another month or two, then there can be an impact. But there is no immediate short-term impact. In this case, our Indian government should form policies to develop industries in the country to reduce dependency on China. One-third of India's production comes from Gujarat. Around 250 companies are working directly or indirectly in research and development. Some companies are working on medicines for coronavirus.
The novel coronavirus, or COVID-19, pandemic has caused severe supply-side disruptions in various sectors, earnings will be cut by 10-15%. Pharma as a sector has emerged as a strong contender to drive the next leg of rally, whenever it comes. This is not just true for India, but globally too pharma companies have performed well. Almost 95% of the organizations are utilizing Real World Data or will utilize it by 2021. Information accessibility and security issues are a couple of the difficulties in utilizing Real World Data, however it tends to be sifted through and will acquire more popularity as organizations and the regulatory bodies from here on might look to bring in creative measure in clinical preliminaries.
Clinical preliminaries are gold residue for pharma however there are cases in the past where the drugs were pulled out from the market significantly after FDA endorsement. The primary issue with clinical preliminary is it looks at a homogeneous population.
Supply chain disruption for India pharma
Any disruption in supply chain of APIs can result in significant shortages in the supply of essential drugs in India. Some of the critical APIs for high-burden disease categories such as circulatory diseases, diabetes and tuberculosis are listed in the National List of Essential Medicines (NLEM). In fact, the current market is largely dependent on China for many antibiotic APIs manufactured by the fermentation route such as penicillin.
For corporates in Asia-Pacific, identifying these supply chain risks may be less evident given that most counterparties tend to be unrated. It is therefore useful to have access to analytical models that not only broadly align with credit ratings, but also have the ability to provide early warning signals of credit deterioration. S&P Global Market Intelligence can help support your enterprise risk management with our Credit Analytics models by:
- Estimating credit scores and identifying factors of weakness for your customers and suppliers
- Overlaying this with qualitative factors such as diversification and payment track record
- Benchmarking the performance of these counterparties with their peers
- Providing an aggregated view on the credit health of regions or industries of exposure
