The German firm announced the 10% price hike – which will come into force on January 1 – earlier this week, explaining that it will be applied to drug excipients belonging to its Eudragit and Resomer product ranges.
Evonik said increasing what it charges for drug excipients is “necessary to cover cost increases” and to maintain service levels.
Spokesman Jurgen Krauter declined to disclose which specific cost increases prompted the price hike, but did say the firm had invested in production processes, equipment and expanded its network of labs and facilities.
“Examples for the expansion of our service portfolio include laboratory expansions in Germany, USA, Japan, India and Argentina. Moreover, we enlarged our service offerings in nearly all field of pharmaceutical development. New laboratories have been established in Bangladesh, Hungary, USA, and Brazil.”
Excipients in Evonik’s Eudragit range are used to coat tablets and are used to protect drug actives as they pass through the gut, to mask unpleasant taste or odour or to sustain the release of active pharmaceutical ingredients over time.
Last month Colorcon announced that Evonik would help it sell a technology called Acryl-EZE, which combines one of the range of Eudragit excipients with a single pass tablet coating system that was developed by the US company.
Evonik’s Resomer range comprises polymers used to encapsulate and control the release of both small molecule APIs and larger peptides and proteins. They are also used to coat implantable medical devices.
Whether directly related or not, Evonik’s announcement of a price increase comes as German politicians debate changes to the country's electricity pricing rules that would certainly have an impact on costs for all members of the specialty chemicals industry.
Earlier this week German Social Democrat politician Hannelore Kraft suggested that the European Union is planning to examine the discounts Germany offers manufacturers that use large amounts of electricity – including chemical firms – to see whether they are anti-competitive.
Germany wants more of its electricity to come from renewables rather than from nuclear power and fossil fuels, with the aim being that 35% of the country’s power will come from green sources in 2020 and 80% by 2050.
To fund the investment in renewables needed to meet these goals the country collects surcharges from electricity users, however, some industrial users are exempt to allow them to compete globally.
However, according to Kraft if the European Union were to deem this exemption anti-competitive it would have a negative impact on industry. She told Reuters that: “We see big risks…If companies have to build [cash] reserves [to pay the surcharges] this could cause a precarious situation for some of them."
According to a report on Euronews Evonik is waiting to see what happens. The firm told the newswire that “was not building up any pre-emptive reserves as the outcome was unclear.”