Drugmakers around the world are trying to spread out where they source ingredients. Piramal Pharma says it has pushed its China exposure for raw materials down into the single digits, a move meant to avoid having too many eggs in one basket as geopolitics and shipping disruptions keep biting.
"One of the things that we worked really hard on is limiting our exposure to China," Chairperson Nandini Piramal told Haslinda Amin on Tuesday. "We've gotten it down to single-digits," she said, without giving more detail. She added, "I think India could be a good supplier to the US and the world," noting, "We have manufacturing talent and the capacity that is different from China."
Supply chain diversification is expensive and slow, which is why it is notable. Market Briefs covers that shift free every morning.
Piramal's comments came on the sidelines of Bloomberg's New Economy Forum in New Delhi. On a panel there, former UK Prime Minister Rishi Sunak argued that countries have "learnt from the experience in critical minerals in not having a dependence on one country and China." He pointed to "a similar dependence in key starting materials or the active pharmaceutical ingredients that are single sourced from China" and called it "a new risk" and "lack of resilience in a critical area for all of us." His pitch: "If you have a trusted partner like India, it can provide that resilience for you." He also said India can "be a massive beneficiary" as supply lines shift.
Piramal gets more than half of its revenue from its contract manufacturing arm and sources 40% of its revenue from North America. The company is also feeling the pinch from US Section 232 measures that set a 100% tariff on many patented medicines and related ingredients. Broader instability, especially in the Middle East, has pushed up the price of pharmaceutical inputs, complicating costs across the sector.
The stock has risen 12.8% so far this year, which the market has treated as an average outcome compared with peers in the Nifty Pharma Index. For your wallet, the headline is simple: the reliability and cost of everyday medicines depend on where ingredients come from, and that map is being redrawn right now.
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