The Global API Industry Pattern is Gradually Shifting to China and India

Before the 1990s, Europe and the United States were the most important API production areas in the world, with large-scale industries and advanced technology. Later, affected by factors such as production costs and environmental protection pressures, the production and supply of APIs in Europe and the United States gradually shifted to the Asia-Pacific region. Currently, global chemical API production is mainly concentrated in five regions: Western Europe, North America, Japan, China and India. Among them, Europe and the United States are gradually reducing the production capacity of APIs, especially in the United States, most generic drug companies do not have their own API production workshops and mainly rely on imports. Emerging markets represented by China and India have risen rapidly and have become major API producers and exporters. Relevant data show that the total global supply of APIs from China and India has risen from 16.7% in 2008 to 47% in 2019.

From a geographical point of view, in Europe, except for France, the Netherlands, Germany, Switzerland, Spain, Italy, Ireland, Russia and some Eastern European countries that have a few API factories, most countries have already given up the production of APIs. In the Americas, the United States, Mexico, Brazil, and Cuba also have some API factories, but the number is not large, and the number of API companies in some countries is still decreasing. In Asia, in addition to China and India, Israel, Japan, and South Korea also have a certain number of API and intermediate factories, but the number is relatively limited. The API industry in Africa is almost zero.

In terms of varieties, developed countries and regions such as the United States and Europe, relying on their advantages in research and development, production technology and intellectual property protection, occupy a dominant position in the field of patented pharmaceutical APIs with high added value; China is dominated by bulk APIs In India, the generic drug industry drives the production of characteristic APIs.

China and India rely on cost advantages to occupy an important position in the API market. As China, India and other developing countries of characteristic API manufacturers continue to increase investment in R&D, improve production technology, improve process levels, and invest in improving production equipment to form specialized production lines, Chinese and Indian API companies are gradually moving towards high-end APIs value chain extension.

Before the outbreak of COVID-19, the five major API production areas had shown a situation of trade-offs among each other. China and India have benefited from the rapid development of their own pharmaceutical industries and the increase in international demand for APIs, and the API industry has grown considerably. And compared with the other three production areas, the future development prospects of the API industry in China and India are generally optimistic. At the same time, due to the similarities between India's pharmaceutical industry and China's, the Indian API industry has formed a climate, and it is expected that it will continue to compete fiercely with Chinese API companies for a long time in the future.