The ongoing tensions in West Asia are beginning to disrupt India’s pharmaceutical supply chain, pushing up the prices of critical raw materials by as much as 200% to 300% within just fifteen days. As a result, drug manufacturers are warning of potential medicine price increases and supply shortages if the situation continues.
The concerns were raised by the Himachal Drug Manufacturers Association (HDMA), which represents around 500 pharmaceutical manufacturing units in Himachal Pradesh, most of them belonging to the MSME sector. The association has submitted a representation to the Union Ministry of Health, urging immediate government intervention to stabilise the supply chain.
Sharp Rise in Raw Material Costs
The crisis has triggered a steep rise in the cost of active pharmaceutical ingredients (APIs), solvents, excipients, and packaging materials—all critical inputs in drug manufacturing. One of the most striking examples is paracetamol, a widely used medicine in India. The cost of its raw material has increased from ₹250 per kg to ₹450 per kg in just two weeks, placing significant pressure on manufacturers. If the upward trend continues, many pharmaceutical companies—especially small and medium manufacturers—may struggle to sustain production at current price levels. Consequently, these rising costs could eventually be passed on to consumers, increasing the price of essential medicines.
MSME Pharma Sector Faces Severe Pressure
The sharp increase in input costs is threatening the viability of the MSME pharmaceutical sector, which plays a vital role in India’s healthcare ecosystem. “Unprecedented 200% to 300% price hikes in APIs, solvents, excipients and packaging materials threaten MSME survival and essential medicine supply,” said Sanjay Sharma, spokesperson, Himachal Drug Manufacturers Association.
These MSME manufacturers are not marginal players in the industry. On the contrary, they supply large volumes of generic medicines to government health programmes, hospital procurement systems, and the open retail market. Therefore, any disruption in their operations could significantly affect the availability of affordable medicines across the country.
Risk to Supply of Essential Medicines
The potential impact extends far beyond the pharmaceutical industry. Millions of Indians rely on low-cost generic medicines produced by MSME manufacturers for the treatment of chronic conditions such as diabetes, hypertension, and respiratory diseases. If production slows or stops due to rising costs, patients could face medicine shortages or higher drug prices, putting additional pressure on the healthcare system.
In addition, the association has raised concerns over shortages of LPG used in industrial boilers, which could further disrupt production. Manufacturers have also warned that prolonged uncertainty may trigger labour migration, compounding operational challenges. Another immediate problem is the viability of existing supply contracts. Many manufacturers have committed to supply medicines at pre-agreed prices, but rapidly rising input costs have made these contracts financially unsustainable.
Industry Calls for Urgent Government Intervention
In response to the crisis, the Himachal Drug Manufacturers Association has urged the government to take swift policy measures to stabilise the market and protect the medicine supply chain. “The MSME pharma sector seeks urgent support to ensure India’s healthcare stability,” Sharma said, adding that the association is ready to present the ground realities directly to policymakers.
A Growing Concern for India’s Healthcare System
As geopolitical tensions continue to ripple through global supply chains, the Indian pharmaceutical industry is increasingly feeling the impact. Without timely intervention, rising raw material costs could disrupt production and undermine the availability of affordable medicines. As reported by businesstoday.in, industry leaders are stressing that swift policy action would be crucial to protect MSME manufacturers, stabilise the supply chain, and ensure uninterrupted access to essential medicines for millions of patients across India.
