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In 1996, during the wave of bombing attacks unleashed on Iraq by a coalition of western countries led by the US, Madeleine Albright, then US ambassador to the United Nations and later secretary of state, was asked on a CBS television programme if the human cost of the war and punitive economic sanctions imposed on a country are worth the price. Albright’s chilling reply is the clearest understanding we have of how the US and its allies view such wars. The collateral damage, for want of a better term, inflicted on the civilian population is not their concern even if thousands of children perish for want of food, drinking water and medical care. It is important to keep this in mind as the criminal assault on Iran by the Israeli-US regimes of Benjamin Netanyahu and Donald Trump inflicts pain across the world. India, the “pharmacy of the world”, as the Indian drug industry is called, is staring at a crisis that will affect not just its population but also those in a host of developing countries in Africa and elsewhere.
Let us hark back to the infamous admission by Albright in 1996. Journalist Lesley Stahl asks: “We have heard that half a million [Iraqi] children have died. I mean, that is more children than died in Hiroshima. Is the price worth it?” The US official’s reply was clear: “I think that is a very hard choice but the price, we think, the price is worth it.”
Given this morality, it is unlikely that the aggressors in the latest offensive will be unduly concerned about the insidious collateral damage that is being inflicted on the global pharma industry, the repercussions of which will affect millions of people, a majority of them children. There are ominous signs that the expanding war in the Gulf could make access to medicines one of its biggest casualties. Missile strikes have disrupted supply chains and forced importers to reroute shipments, especially of temperature-sensitive medicines such as for cancer treatment which require refrigeration. As news agencies report that key air transit hubs in the Gulf have been knocked out, Indian pharma is showing signs of nervousness. There are no shortages of medicines as yet but industry and trade bodies have warned that a scarcity of critical raw materials is building up in the complex chemical chain involved in drug manufacture. The lobby group of the small and medium drug makers warns that the rising input costs are already being felt at the wholesale level and will affect the entire distribution chain in coming days. Drugs in the frontline of disruption have been identified as paracetamol, commonly used to treat fever, diabetes medicines and a clutch of antibiotics routinely used to treat millions daily.
What happens in India will matter in differing degrees to the rest of the world. Indian pharma provides access to affordable generic medicines in around 200 countries, offering a lifeline to people and governments that cannot pay the steep costs of innovator drugs. But that lifeline which allows public health programmes to run in Africa and other susceptible regions is in jeopardy because of a fundamental weakness of the industry: a heavy dependence on imported raw materials. The Iran war has once again exposed the soft underbelly of the largest generics producer.
Although domestic production has increased in recent years, the industry is hugely dependent on imports, particularly from China, for the basic building blocks that go into the making of a medicine. This is how the chemical value chain stacks up in the manufacture of a drug. Starting with key starting materials (KSMs) and intermediates at the bottom layers, active pharmaceutical ingredients (APIs) sit at the top of the pyramid. It is on the bottom two layers of this pyramid that China has a stranglehold.
As the war drags on, the situation is expected to worsen. Official statements, however, tend to mask the risks the country faces, both from disruptions of the global supply chain and from price escalations. In early March, Union minister for chemicals and fertilisers J P Nadda told the Rajya Sabha that thanks to a production-linked incentive scheme aimed at pushing up domestic capabilities, India was exporting more APIs than it was importing, suggesting that India was comfortably placed. In the 2025 financial year, exports touched Rs 41,500 crore while imports totalled Rs 39,215 crore. These figures mask the reality of India’s increasing vulnerabilities. The cost of imported APIs is rising—some of it comes from Europe—and the intensity of imports from China has deepened from 70 per cent two years ago to 74 per cent. In sum, Rs 29,064 crore of the import bill was paid to China. Import dependency carries other risks. Indian firms will now pay higher logistics costs and face more currency volatility.
One reason why the world looks up to India is its vaccines for children. The country supplies the bulk of DPT (diphtheria, pertussis and tetanus), BCG (Bacille Calmette-Guérin) and measles required by Unicef, World Health Organization and a host of countries. But here again, there could be bottlenecks in the wake of the Iran war because roughly 70 per cent of India's vaccine raw materials are sourced from other countries but primarily the US and China. This issue needs to be resolved at the earliest by New Delhi.
It is important to recall what happened to Iraqi children as a result of the Allied invasion and sanctions. The widely cited figure of 500,000 child deaths put out in a Unicef survey was disputed with several US mainstream media outlets and medical journals debunking the figures. Even if the figures had been overstated (by a UN agency?) it would be difficult for right thinking people to deny the catastrophic consequences of destroying health and other essential infrastructure on very young children.
Since the Iraqi invasion, the transformation of war strategy by the invading powers, particularly Israel, calls for a change in the definition of collateral damage. For decades, it has been used euphemistically to describe the inadvertent killing of non-combatants. Civilian deaths and damage to essential infrastructure is no longer an unintended consequence; it is the actual mission of an assault as the killing of 167 schoolchildren in Minab, south Iran, on the first day of the war by the US shows.
In the time of war, India’s drug industry will have to play a larger-than-usual role to keep medicines and vaccinations flowing. It is also a reminder that the country needs to focus on innovation and research if it is to take on the competition.