Export of APIs to India is blocked, what is the way out for Chinese companies

The Indian government approved a policy plan to promote the reduction of import dependence on APIs and key intermediates.
    ——One of the plans: The central government will cooperate with local states to develop 3 large-scale API industrial parks, and provide support of 10 billion rupees for each industrial park in each local state in the next 5 years.
    ——Plan Two: Provide support to qualified manufacturers that meet the supply of 53 key APIs (including 26 fermentation APIs and 27 chemical APIs). ·


Source of raw materials for world pharmacies

India produces 1/3 of the world's generic drugs and 60% of the vaccines, which meets about 60% of the vaccine demand of the World Health Organization (WHO), and is known as the world pharmacy. As one of the few countries with more than 650 FDA-approved pharmaceutical factories outside the United States, India's approved American generic drugs (ANDA) account for 44% of the global share.

In terms of quantity, India is the world's third largest producer of medicines, and about 70% of the raw materials needed to produce these medicines are imported from China. Certain varieties, such as antibiotics, are more than 90% dependent. The total annual imports of Indian API and pharmaceutical intermediates exceed 250 billion rupees (about 3.5 billion US dollars), accounting for more than 67% of the national demand.

In the early 1990s, India was once one of the major API producers in the world. Later, due to changes in domestic industrial policies and regulatory regulations, the concentration of the API market gradually increased and many pharmaceutical companies transformed.


Crisis-induced change

As early as 14 years, the Indian government pointed out in the management report that the amount of API imported from China was so large that it needs to be taken seriously. Affected by the epidemic this year, the pharmaceutical industries around the world are paying more and more attention to the supply chain. In March, India issued a draft guidance on the encouragement of localization (PLI) plan, with a funding of 694 billion rupees (about 900 million US dollars) to promote India. The domestic production of key starting materials (KSMs), pharmaceutical intermediates (DIs) and APIs required by the pharmaceutical industry will take about 8 years to complete.

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As the domestic situation continues to improve, the 84th API China also opened in Qingdao in June to promote offline information exchanges and business exchanges, and inject cardiotonic drugs into the pharmaceutical industry. The domestic pharmaceutical industry has gradually entered the post-epidemic era. The production and export of pharmaceutical intermediates have gradually become normal.

"China has solved the urgent needs of the Indian pharmaceutical industry"

On July 24, the "Economic Times" published an article stating that since the outbreak of the coronavirus, the Indian pharmaceutical industry has been facing shortages of raw materials and rising costs. As the supply of raw materials from China returns to normal, the Indian pharmaceutical industry has Worries are gradually easing.

The report stated that due to reduced supply, the price of domestic API in India rose sharply in May and June. The price of paracetamol (the bulk drug used in many formulations) has increased by 27% compared to before the outbreak. The prices of the antibiotics ciprofloxacin and penicillin increased by 20%. Currently, the price of API is currently in a downward trend. As a result, the cost of most APIs in India has fallen by 20% from the highest level from May to June.

Far and near worries, the road to the future

In this way, even if India has introduced corresponding policies to support the localization of APIs, APIs from China will still be a stable part of its market. That is, in the next short period of time, some APIs imported from China will still be maintained. In the long run, in addition to the relevant policy changes in the exporting country, India, as China’s domestic regulations, laws and regulations, and environmental protection are becoming more and more stringent, whether it is products or export directions, domestic API manufacturers must follow suit. change.