Currently, China is the global leader in the production and export of APIs, which is around 20 percent of the world’s API production.
The API industry in China plays an important role in the global pharmaceutical ecosystem. China produces and exports around 40% of APIs sent out to the world. In fact, some of the most important APIs such as paracetamol are imported from China. This is due to the low cost of utilities and greater government support.
The API Industry:
According to the China Chamber of Commerce for Import & Export of Medicine and Health products in 2019, APIs produced and exported by China reached 10.12 million tonnes (+9% year-on-year), worth $33.7 billion (+12% year-on-year).
Leading API producers in China reported strong sales in 1Q20, with Shenzhen Hepalink Pharmaceutical Group, Zhejiang Huahai Pharmaceutical and Zhejiang Langhua Pharmaceuticals seeing revenue increase by 37.1% and 31% yoy.
Compared with India, China’s current strengths reside in its better industrial infrastructure, large scale manufacturing capability of raw materials and relatively low labour and material costs. The cost of production in China is 20-30 percent lower than in India. The destinations of APIs produced and exported by China comprise 189 countries and regions, mainly in Asia, Europe and North America.
The Chinese API Market is rapidly growing and is now recognised as one of the world’s most dynamic emerging markets attracting many drug companies around the world. There are no ifs, ands or buts about it in this day and age – it can be obscenely expensive to produce new APIs and there are many positive advantages surrounding the Chinese API Market. Pharmaceutical companies need to examine how they could produce safe and potent medications in the most efficient and cost-effective manner. Turning to CDMO’s from China could be the way forward.
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