As one of the largest API manufacturers, China has established an integrated industrial system, after decades of development. CRI estimated that by the end of 2016, the number of chemical API manufacturers in China had exceeded 1,000, capable of producing 1,500 categories and 5 million tons of APIs.
CRI considers that China is the world’s leading exporter of API and enjoys cost advantages compared with competitors. In the past decade, China’s share of the global active pharmaceutical ingredient market has been increasing. China is the world’s largest producer and exporter of API. Its production volume was over 3 million tons in 2016. Currently, the majority of chemical API companies in China are raw material suppliers, which gain the market share by scale and low costs and are weak in research and development.
CRI analyzed that China now enjoys advantages in API products in the global market. For example, antibiotic and bacteriophage, China-made penicillin, tetracycline and chloromycetin own price advantage. China is also the world’s largest manufacturer and exporter of vitamin products, in which VC is the product with the biggest advantage. China’s second-largest API exports are antipyretics and analgesics products. As the China’s export price is 33.3% lower than the price in the international market, China-made citric acid and dexamethasone take a certain share in the global market.
In the global market of active pharmaceutical ingredient, except for the monopoly of some patented APIs, the market of general chemical API is perfectly competitive. Meanwhile, with the development of global pharmaceutical industry, the increasing demand of generic drugs and the change of API production patterns, international preparation manufacturers tend to outsource production, that is, purchasing APIs from API and preparation producers in developing countries. More and more API and preparation manufacturers in emerging markets, represented by China, India, Brazil and Russia, have been engaged in the supply and demand globally. As the world’s largest producer and exporter of API, Chinese API enterprises are confronted with competition not only from domestic competitors but also from foreign enterprises, especially Indian companies. Therefore, China’s API industry becomes increasingly competitive.
According to CRI, due to the rising labor cost and increasingly rigorous environment policies in China, the production cost of API has been lifted and consequently Chinese API could not maintain the price advantage. Therefore, the transfer to mid-high end market will be the future development trends of API.