On November 9,2021, the National Development and Reform Commission and the Ministry of Industry and Information Technology issued the Notice on the Implementation Plan of Promoting the High-quality Development of API Industry. China intends to develop value-added and high-growth varieties, green and low-carbon technologies and equipment, supporting leading enterprises to gain international competitiveness and creating industrial hubs and production bases with global influence by 2025. This plan is the first policy document for the overall development of the API industry published by two significant ministries in recent years, which has crucial guiding significance.
Specialty APIs
API refers to any substance or a mixture of substances becoming an active ingredient of medicine when used in pharmaceutical manufacturing. APIs can be divided into three categories: bulk, specialty, and patent API in terms of differences in the patent period of downstream preparations. The specialty APIs are mainly chronic disease drugs, antiviral agents, anti-tumor drugs, contrast agents, etc. The downstream of specialty APIs are "new" generic, whose patents have just expired or are about to expire. Compared to bulk API, the technical barriers of specialty APIs are relatively high, with a looser market competition pattern and a relatively high gross profit ratio.
Most pharmaceutical enterprises of specialty API take total synthesis, fermentation, and chiral compounds as their major technology platforms. A few specialty API medicines, such as nucleosides, polypeptides, and PEG, belong to emerging technology platforms. Compared with traditional small molecule drug synthesis, specialty APIs based on new technology platforms are relatively scarce, and the technical threshold for R&D is high. Therefore, manufacturers with the production capacity of related categories have a unique competitive edge.
Market Positioning of Specialty APIs in China
China is a large manufacturer of chemical raw materials, the overall industrial chain layout in China is good for developing the pharmaceutical intermediate and the API industry. At the beginning of industrial development, due to a series of backwardness in technology, capital, and equipment, the development of the entire API industry is extensive, and the proportion of specialty API, with high technical barriers and high gross profit ratio, is relatively low. In the early period, the advantages of the Chinese API industry chain are: more concentrated in intermediates and some bulk API, and the specialty APIs with high added value are mastered mainly by European, American, and Indian enterprises.
At present, China is the world's largest manufacturer and exporter of APIs. But in the standardized market with higher cost performance, specialty API is confronted with competition from mature suppliers in India and China. API products in the Indian market are mainly penicillin, clopidogrel, atorvastatin, and other varieties. These are all specialty API varieties used to treat diabetes, swelling, cardiovascular and other fields. India's specialty APIs account for a leading position in the standardized market, second only to the United States.
With the progress of the pandemic, China's API industry has ushered in an opportunity for development, and the growth of the specialty API industry has accelerated. From the perspective of industry attributes, the specialty API is a technology-driven industry. The industry enterprises are usually marked by a high proportion of R&D personnel, R&D expense rate, and a relatively stable net profit ratio. The industry has a high threshold and barriers in safety, environmental protection, quality, and cost control. Also, corporate champions have established multi-dimensional competitive advantages in production technology, capacity certification, and customer stickiness. and customer stickiness.
Development Trend in China
Early specialty API manufacturers in China represented by Huahai Pharmaceutical Co., Ltd and Zhejiang Hisun Pharmaceutical Co., Ltd, focus on statins, sartans and other specialty APIs. In recent years, new and cutting-edge APIs such as tinib and saban have emerged and been favored by the ...
(All Rights Reserved)