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    Home > How should China responds as a major API exporter?

    How should China responds as a major API exporter?

    Echemi 2020-03-24

    Europe and the United States advocate the return of API manufacturing.

    How should China responds as a major API exporter?


    The secondary crisis brought about by the global fermentation of the epidemic still continues.

     

    The stagnation of API production and supply has caused a shortage of preparations in some countries. At the same time, the Chinese Ministry of Science and Technology mentioned in February that the antimalarial drug "chloroquine phosphate" is effective in the treatment of novel coronavirus pneumonia, and its API prices have also risen.

     

    "Before the epidemic, the price of chloroquine intermediates per ton was around 700,000, but now it is about 900,000 a ton, and we have no stock yet." Manager Xu, a salesman of chloroquine phosphate intermediates in Hubei, told Interface News.

     

    The antimalarial drug chloroquine phosphate was previously included in the Novel Coronavirus Pneumonia Treatment Protocol (Trial Version 6) and is currently being used in clinical trials in the United States to evaluate the efficacy of treatment for novel coronavirus pneumonia.

     

    Manager Xu said that the recent inquiries about chloroquine phosphate APIs and intermediates have increased significantly, but due to the shutdown and logistics impact of the previous period, the raw materials for the synthesis of chloroquine have also risen accordingly. "It is also difficult for us to get now. There are orders and demands but no goods. "The sales staff said that it is difficult to find the ready-made chloroquine phosphate APIs and intermediates in the domestic market.

     

    Interface News previously reported that, as a major exporter of global APIs, domestic API prices have started to rise since February because of the novel coronavirus epidemic. According to Boyar’s data on March 5th , vitamin B1, biotin, vitamin K3, Vitamin E, nicotinamide, vitamin D3, and vitamin A increased the most, and increased by 106%, 86%, 59%, 34%, 18%, 16%, and 7% compared to January 20 respectively.

     

    "During the epidemic, although the local government has proposed to resume work for pharmaceutical companies to ensure stable drug supply, however, upstream chemical raw materials and pharmaceutical intermediates are under-started.", a sales director from ECHEMI's pharmaceutical division who did not wish to be named said in an interview with Interface News. Hubei, which has the most severe domestic epidemic situation, is also one of the important vitamin production bases in China.

     

    With the decline of the domestic epidemic, the upstream has begun operation, and the current issue of API production has gradually eased. But at the same time, the global fermentation of the epidemic has hindered the current international shipments and directly affected the export of raw materials.

     

    "We now have to confirm with our clients before shipping overseas that their domestic currency has depreciated, their ports have been affected, and we have confirmed with the airlines whether freight is feasible." Said the sales director of ECHEMI's pharmaceutical division.

     

    The United States, the major exporter of bulk APIs in China, has been affected by the novel coronavirus  epidemic since February. Some pharmaceutical companies already have stated that due to the shortage of finished product supply for bulk medicines, 20 drug supply chains are closely related to China.

     

    Under this context, the United States and other large pharmaceutical preparations began to propose the concept of API return.

     

    On March 15th, US Congressman Earl L. Buddy Carter stated in an interview with Fox News that in order to achieve the purpose of motivating companies to return to the United States, the office of members of Congress is enacting relevant laws to encourage companies to move factories back to the United States.

     

    From March 3, India also restricted the export of 26 APIs and finished drugs such as paracetamol, tinidazole, erythromycin, vitamin B12, heparin, and ibuprofen.

     

    "The epidemic made some countries realize that APIs are related to people's health and are part of national security. Domestic production should be encouraged," said the sales director of ECHEMI's pharmaceutical division.

     

    Previously, some multinational pharmaceutical companies integrated supply safety and price factors, and would choose to supply APIs in European factories and China at the same time. "One of the major importing country for China's APIs is Ireland. These APIs are those produced by multinational pharmaceutical companies in their local factories in Ireland. "

     

    The aforementioned sales director believes that China currently has the world's most complete pharmaceutical industry chain, but after the volume purchase, the industry exists in a disorderly competition. Once several major API importing countries successively implement the return of API manufacturing in the next few years, it will have a greater impact on the domestic API industry.

     

    In order to make the product price competitive, some of the API companies that had the previous preparations started to raise the prices of the corresponding APIs or through the acquisition of the company to achieve the API monopoly. As a result, some manufacturers that did not have API production capabilities had to try to import raw materials through India Medicine for formulation production.

     

    "In the process of consistency evaluation, the quality of the drug substance needs to be researched, but some API companies that have their own preparations will be able to over-evaluate themselves, and will jam other preparation companies in this regard." Consistency evaluation is a simulation The threshold for pharmaceutical companies to participate in the national volume purchase, whether they can participate in the volume purchase will directly determine the market share of the company's products.

     

    In order to maintain the domestic market price or prevent other companies from over-assessment, pharmaceutical companies with APIs will choose to partial export , so that some export prices of APIs are lower than the domestic market.

     

    Once Europe, the United States, and India return to API production in the next few years, China, a major exporter of APIs is bound to usher in an overcapacity situation. "These domestic companies are beginning to consider improving their comprehensive capabilities to occupy the terminal market for pharmaceutical products. In this way, even if some countries' APIs have returned, pharmaceutical products can occupy a part of the market."

     

    However, at the same time, the sales director of the ECHEMI Pharmaceutical Division also said that this requires the efforts of bulk drug companies, pharmaceutical companies, and export companies. "If the current mode continues, it is hard for everyone to support each other but not communicate with each other’.

     

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