KUALA LUMPUR (May 21): Duopharma Biotech Bhd (KL:DPHARMA) is seeking alternative sources of inputs to reduce concentration risks amid ongoing supply chain disruptions linked to the Iran war.

The company is now heavily reliant on imports, particularly from China and India, which dominate the global active pharmaceutical ingredients (APIs) market, said group chief executive officer Wan Amir-Jeffery Wan Abdul Majid. APIs are the key substances used in the manufacturing of a drug.

Duopharma also orders other raw materials and packaging from abroad, Wan Amir-Jeffery said. “If the war continues, suppliers will also seek to manage their own risks, as they have industries to sustain.”

Geopolitical tensions in the Middle East have disrupted the flow of goods while raising the costs of logistics and insurance for shipping everything from oil to metal. More than two months into the US-Israeli war on Iran, there is little prospect of durable peace in the region.

For Duopharma, prices of certain inputs have risen by between 5% and 15%, Wan Amir-Jeffery said. While the company has limited ability to pass on higher input costs to its government segment, it has greater flexibility to adjust prices for the private sector, he noted.

Speaking to reporters after the group’s annual general meeting on Thursday, Wan Amir-Jeffery highlighted that costs of certain materials, such as the widely used paracetamol, have also risen sharply.

New sources, however, must first be approved by the National Pharmaceutical Regulatory Agency (NPRA) under the Ministry of Health. Regulations require all API sources to be approved by the agency to ensure the safety, efficacy and consistent quality of finished medications.

“We have received a commitment from NPRA to expedite the evaluation of additional sources, including second and third suppliers, as we work to de-risk both single- and dual-source dependencies,” Wan Amir-Jeffery added.

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